LONDON, Oct 7 (Reuters) - Trafigura has sold five oil vessels to a unit of China's Bank of Communications , ending the trading house's move into owning tankers, the company said on Friday.
Under the deal, the five medium-range tankers, ordered by Trafigura in 2013 from a shipyard in China, were sold to Bank of Communications Financial Leasing Company Ltd and subsequently leased back to the Swiss trading house. Financial terms were not disclosed.
"The ships were bought at low entry levels and we saw an opportunity to sell now. While we have a significantly growing cargo programme it is not a must for us also to own the steel," Trafigura global head of wet freight Rasmus Bach Nielsen said in a statement.
"The sale and lease back of the vessels concludes an entry and exit for now in owning product tankers for Trafigura."
Prospects for the oil tanker market have become weaker as the sector is bracing for more ships to hit the water and expectation of softer oil demand, which are already dragging rates lower.
Trafigura said it expected to complete 2,700 oil shipping fixtures this year on the back of "significantly increasing trading volumes". That compared with 1,959 fixtures booked in 2015 and 1,680 in 2014.
Other segments of the global shipping industry are going through their worst downturn ever. At the same time, Chinese companies including its banks have been looking at acquiring assets in the shipping sector.
China's top shipping group COSCO Shipping has bought a 51 percent stake in Greece's biggest port Piraeus.
Sources told Reuters in July that China Merchants had been in talks with the Royal Bank of Scotland over acquiring its Greek shipping unit. RBS said last month it had begun efforts to wind down its global shipping finance business, ending efforts to sell it off. (Reporting by Jonathan Saul; Editing by Adrian Croft)