Ship owners still active in the second hand market, but appetite is thin

The latest figures from shipbrokers indicate that ship owners appear to still be active in the second hand vessel purchase market, in fact with rejuvenated interest, although, the sellers’ reluctancy to put more vessels to the market, is trimming
buyers’ appetite. According to the latest report from Shiptrade Services, the purchase interest remains strong this week, as well in the dry bulk sector. “The demand for tankers continued as well. Buyers for Containers vessels continued to search the market for the right candidate” said the shipbroker in its weekly report.
Highlights of the week included: The sale of M/V “Ansac Asia” (33.945 dwt, Built 1998 Kanda, JPN) which is reported sold for USD 17 mill to Undisclosed buyers sets a new basis for similar vessels, compared to the sale of M/V “F&K” (32.942 dwt, Built 1998 Kand, JPN) which was reported sold in early February for USD 18.75 mill.
Torm has sold one more LR II tanker, the M/T “Torm Marie” (abt 109.000 dwt,, Built 2006 Dalian, CHN) for USD 46 mill, to First Ship Lease Trust (FSL) of Singapore with a 7 year Bareboat Back to “Torm” at undisclosed rates. An Identical deal with the one reported in the previous week. 

In a separate report Golden Destiny said that “there was a quite soft sentiment in the markets this week, “with bulk carriers attracting the buying appetite of investors in the secondhand market and demolition activity showing some signs of easing off. The newbuidling business has seen a slow pace of weekly growth with bulk carriers being out of the game. However, newbuilding units are still fashionable as appealing newbuilding prices stimulate the interest of the industry players, especial in the container segment. Overall, the week ended with 24 transactions reported in the secondhand and demolition market, while the highest activity has been recorded again in the newbuilding market with 20 new contracts reported worldwide. 

In the secondhand market, 14 vessels reported to have changed hands this week at a total invested capital in the region of US$161 million, 6 transactions reported with undisclosed sale price. In terms of the reported number of transactions, the S&P activity has been marked with a 8% negative w-o-w change, while is down by 33% comparable with previous year’s weekly S&P activity when 21 vessels induced buyers’ interest with bulk carriers grasping 62% share of the total volume of S&P activity. In terms of invested capital, the most overweight sector for this week is the tanker segment grasping 51% of the total amount of money invested. In the tanker segment, more preference was been witness to modern tonnage versus vintage tonnage for bulk carriers” said the shipbroker in its report. 

Meanwhile, in an interesting analysis, shipbroker Intermodal found that asset values in the dry bulk market, are well below their 11-year averages for modern vessels (ships of 5 years old or less). Capesizes are the biggest losers in terms of value, with 23.83% below their average, with Panamaxes following with -10.63%. Supramaxes are trading lower by almost 10% from their average, while the only gainers are the Handysizes, which are actually higher by 4.91%, compared to their average. In terms of freight rate correlation, Intermodal noted that Capesizes are now earning almost 75% lower (1-year time-charter) from their historical average (11 years back), with Panamaxes at -40.16% lower.
In terms of demolition activity, Shiptrade said that “with monsoon season fully underway across the Indian subcontinent, which is creating a downward trend, buyers are generally unwilling to offer at high levels and only a few sales have been reported this week. There was not much activity in Bangladesh last week with buyers reluctant to move in this volatile market. No change at the Pakistani market as well due to the low budget of the buyers. China has a gap of about USD 50 with the Indian subcontinent which is expected to be reduced” said the shipboker.
Nikos Roussanoglou, Hellenic Shipping News Worldwide