A research report from Huayuan Securities indicates that according to the Yihangyun public account, South Korea's Sinokor (Changjin Merchant Ship) plans to sell all of its container vessels to Mediterranean Shipping Company (MSC). The capital raised from this divestment will be concentrated in the VLCC (Very Large Crude Carrier) sector, enabling rapid expansion of controlled capacity through a strategy of "second-hand acquisitions plus long-term charter control."
As early as the beginning of 2025, Sinokor and Trafigura deepened their cooperation, optimistic about the VLCC market outlook, potentially forming a joint operation. The number of VLCCs under their control could exceed 100 vessels, representing approximately 12% of the market share. With a large and continuously expanding VLCC fleet, Sinokor is positioned to gain greater leverage in negotiations with cargo owners and could become a key price setter in the VLCC market.
The main views of Huayuan Securities are as follows:
Sinokor's potential exit from the container shipping business and major bet on VLCCs is expected to strongly support asset prices and time charter rates. According to the Yihangyun public account, Sinokor's planned sale of its entire container fleet to MSC is valued at approximately $2.5 to $3 billion. The proceeds are being directed towards the VLCC sector. In the second-hand vessel market, Sinokor has been acquiring VLCCs around 15 years old at prices about 10-15% above the mainstream valuation for December 2025 (a Gibson estimate of $59-60 million). Data from VesselsValue shows that Sinokor and Trafigura concluded deals for at least 39 second-hand VLCCs in January 2026. Concurrently, the company is advancing multiple extensions of time charters and new chartering agreements with major shipowners.
Sinokor's aggressive expansion is increasing industry concentration and has the potential to reshape pricing logic. According to the shipping industry public account, the potential joint operation with Trafigura could control over 100 VLCCs. On February 5, 2026, the CEO of DHT Holdings stated that Sinokor and its partner MSC continue to absorb significant VLCC capacity from other owners, with actual control over an estimated 120-130 VLCCs. This represents about 25% of all compliant spot market VLCC fleets, and further acquisitions may be under consideration. This substantial and growing fleet enhances Sinokor's bargaining power.
The VLCC market exhibits high sensitivity to supply-side influences. On September 25, 2019, the sudden sanctioning of a major oil shipping company by the US potentially affected 44 VLCCs under its group (7.5% of the global fleet), causing a short-term disruption. The VLCC TD3c freight rate, which was only $35,000 per day on the sanction date, surged to around $300,000 per day approximately two weeks later, demonstrating the market's acute reaction to supply shocks.
The key reason for Sinokor's heavy investment in VLCCs may lie in anticipated long-term tightness of compliant supply. Huayuan Securities believes that, from a medium to long-term perspective, the VLCC supply side faces a vessel shortage issue as vessels delivered between 2006 and 2012, which account for 33.8% of the current fleet, begin to reach 20 years of age starting in 2026. Future annual deliveries are expected to only meet replacement needs. This situation, coupled with persistent global crude demand growth and increasingly stringent environmental regulations, could lead to sustained supply tightness, supporting favorable freight rates over the medium to long term.
Regarding investment targets, the fundamental outlook for the oil shipping sector remains positive, with geopolitical developments acting as a catalyst, potentially heralding a "major era for oil shipping." Sinokor's strategic focus on VLCCs is likely to reshape oil shipping pricing dynamics, potentially significantly increasing the stability and average level of VLCC freight rates. It is recommended to monitor China Merchants Energy Shipping (601872.SH), COSCO SHIP ENGY (600026.SH, 01138), and China Merchants Nanjing Tanker (601975.SH).
Risks include crude oil production falling short of expectations, geopolitical event risks, uncertainties regarding US sanctions, weaker-than-expected crude oil demand, and slower-than-expected scrapping of older vessels.