Since Russia invaded Ukraine two years ago, nearly 50 merchant ships have been languishing in its waters, stuck in ports too dangerous to sail from.

But while these ships have not moved, some of their owners have changed, highlighting the risks some market players are prepared to take in the hunt for bargains.

A Reuters analysis of port and ship tracking data detailing the line-up of ships has found at least nine vessels stranded in Ukrainian ports have been sold since February 2023 in a series of discrete deals.

The sold ships are stuck in Mykolaiv, Kherson and Mariupol ports - all of which remain inaccessible. At least five others were sold while in Ukrainian ports but have since been able to sail from the country, according to three industry sources.

For their original owners, the length of time the ships were unable to sail meant they could claim the majority – if not all – the value of the vessel on insurance, according to underwriters and shipping sources familiar with the deals.

That allowed the ships to be sold on at a discount to investors willing to take a bet that at some point the vessels can sail again.

"Who wants to buy a ship in a war zone? Some people do," said Richard Neylon, partner at law firm HFW, who has worked on several of these deals.

"Category one is people who think they can get the ship out, and a few have got out. Category two are people who recognise they are in it for the long haul, and ideally they factor in that risk.”

Neylon said most ships were going for around 25% of their original value, though the three industry sources said some had sold at as much as 80% of their value.

The price depends on the ship's condition, they said, with some likely to be only fit to be sold for scrap.

TRADE RUCTIONS

The war in Ukraine created an unprecedented ruction for the shipping industry, turning ports that were crucial to the global trade in grain and metals into mined, no-go areas overnight.

The gross tonnage of ships calling at Ukrainian ports during the first quarter of 2023 was down more than 70% compared with the average in the year before the invasion, according to analysis by the OECD published in November 2023.

Currently, ships can only leave Ukraine from three ports - Odesa, Chornomorsk and Pivdennyi - along a temporary route set up for civilian vessels that has no formal safety guarantees, though Russia says it does not target non-military ships.

London-listed shipping company Taylor Maritime Investments had a ship stranded in Ukraine at an undisclosed port and claimed insurance in late February 2023, after which the group said the ship left its ownership. The company declined to give further details.

"We put the safety of our crew first in all circumstances when there's real risk," CEO Edward Buttery told Reuters.

"I don't want to be responsible for people getting injured or worse when I have the ability not to have to make that decision."

Others, though, are willing to take chances. The three sources said Hamburg-based shipping company Blumenthal JMK bought at least four ships in Ukraine, including the Liberian-flagged Primus which sailed out of Odesa last August and is listed as being managed by Blumenthal’s unit in Asia, with the owner’s details care of Blumenthal in Asia.

The company did not respond to requests for comment.

Other buyers appear to be companies registered in Liberia or unknown parties, according to shipping records.

But even at low prices, the stakes are getting higher for buyers. Insurance is far more expensive than for owners who bought the ships before the war, and is now renewed on a weekly basis.

The cost of maintaining vessels includes paying for insurance - a percentage of the ship's value - which is currently running at around 1.5% weekly for additional war risk insurance alone.

The stuck ships' value varies from $20 million to $200 million, the three sources said.

Owners also need to pay for keeping the vessel maintained and other expenses including a basic crew, usually local Ukrainians, the sources added.

Even when stationary, ships in Ukrainian ports are vulnerable.

On Feb. 27, the Turkey-flagged general cargo ship Kuruoglu-3 was hit by two Russian missiles while docked in Kherson, causing the vessel to list on its side, with concerns that it may eventually sink as it is not fully crewed, a representative of the vessel’s owner Kuruoglu Maritime told Reuters.

But some ship buyers are familiar with such risks.

"It's surprising the markets ... that you had no idea existed," said Adrian Cox, CEO of insurer Beazley.

"Just like there's a market for distressed debt, there's a market for stuck ships." (Reporting by Jonathan Saul and Carolyn Cohn in London. Additional reporting by Michael Hogan in Hamburg. Editing by Rachel Armstrong and Mark Potter)