Sinokor Dominates VLCC Market with Aggressive Acquisitions
Sinokor, a prominent South Korean shipping company, is making waves in the Very Large Crude Carrier (VLCC) market with a series of strategic acquisitions. Over the past month, the company has secured more than 30 VLCCs, significantly boosting its position in the global shipping industry. This surge in acquisitions has positioned Sinokor at the forefront of VLCC ownership, alongside five other major players: China Merchants, COSCO, Fredriksen, Bahri, and the Angelicoussis Group. According to forecasts from Greece’s Allied Shipbroking, if Sinokor’s acquisition plans materialize, these six companies could collectively control nearly 30% of the global VLCC fleet, which consists of 911 ships.
The rapid consolidation of ownership among these top six companies marks a significant shift in a previously fragmented sector. Sinokor’s aggressive strategy comes as a surprise to many in the industry, especially given the company’s recent decision to exit the container shipping market. By selling most of its boxships to Mediterranean Shipping Co. (MSC), Sinokor has redirected its focus toward supertankers, demonstrating a bold commitment to the VLCC segment.
Market Dynamics and Pricing Strategies
Brokers have expressed astonishment at Sinokor’s willingness to pay above market rates for VLCCs. In December, the market price for 15-year-old VLCCs was estimated at around $59 million to $60 million. However, Sinokor has been paying 10-15% more than these figures to secure deals and ensure a steady supply of tonnage. This aggressive pricing strategy has not only allowed Sinokor to expand its fleet but has also led to a series of time-charter extensions and new fixtures with major owners.
In addition to its acquisition strategy, Sinokor has been active in the charter market, securing or extending charters for periods ranging from one to three years. This has increased its chartered-in VLCC fleet to over 40 units. Broker Hartland estimates that Sinokor now operates a VLCC fleet of nearly 100 ships, giving it an 11% market share of the largest tanker vessels and between 15% and 20% of the compliant, non-sanctioned fleet.
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While some analysts caution that Sinokor’s aggressive moves carry inherent market-timing risks, the company’s actions reflect a strong vote of confidence in the VLCC segment. As the shipping industry continues to evolve, Sinokor’s strategy may set a precedent for future market dynamics and ownership structures within the VLCC sector.
