As more shipowners are piling into the market for secondhand vessels, prices were bound to quickly pick up steam. In its latest weekly report, shipbroker Intermodal said that “as it was expected, the strong dry bulk freight market of the past couple of months has inspired similar activity in the second-hand market. Nonetheless, we witness that asset prices have not increased as much as someone would expect given the strong enthusiasm out there. Instead, they have slightly scaled back and steadied at improved compared to a year ago but not excessive levels. Despite the fact that the number of owners inspecting each candidate is admittedly increased, we don’t see excessive competition among them, the kind of competition that would help prices shoot up. This has kept some ages/sizes of vessels at price levels well below that average of the past five years”.
According to Intermodal’s SnP Broker, Mr. Konstantinos Kontomichis, “Panamax prices have covered most of the ground up to their five year average levels. Representative of this is the 10-yr old M/V Coral Topaz (76kdwt, blt ‘07 Sasebo – SS/DD due) currently negotiated at region USD14.0, a price implying a small premium on the USD 14.0m fetched by the M/V Ocean Antwerp (76kdwt, blt’07 Imabari – SS/DD passed) given that the future owner of the Coral Topaz will have to bear the imminent dry docking cost”.
He added that “Supramax values are even more intriguing, specifically in the 5-yr and 10-yr age ranges that are still well discounted compared to their respective five year average levels. The M/V Neptune Pioneer (56kdwt, blt’07 Mitsui – SS/DD passed) was committed 10 days ago at USD12.7m, 15% lower than the respective five year average. Handies are the most discounted across all ages. The M/V IVS Kite (32kdwt, blt’02 Kanda – SS/DD passed) was reported sold last week at USD6.7m, 19% lower compared to the respective five year average price”.
Kontomichis said that “it goes without saying that a comparison to five-year average prices on its own is not enough in helping determine whether a vessel is cheap, a bargain or expensive. Buyers’ pricing perception is also shaped by freight expectations, size/sector fundamentals etc. but the discount compared to the five year average amidst decent earnings, does give an indication of whether the SnP market has gotten ahead of itself and this doesn’t seem to be the case in this instance. Additionally, although buying interest is more Panamax oriented at the moment, 5-yr old Supras and 5-yr/ 10-yr old Handies are attractive for two reasons; one being the aforementioned discounts and second the stronger resistance these sizes will demonstrate in a possible market correction down the line”, the shipbroker concluded.
Meanwhile, in the S&P market this week, Intermodal said that “the strong appetite for dry bulk tonnage continues to impress, while tanker and container candidates are also attracting increased interest. On the tanker side we had the sale of the “LR ALDEBARAN” (109,672dwt-blt ‘07, China), which was sold to Greek owner, NGM Energy, for a price in the region $15.8m. On the dry bulker side sector we had the sale of the “DARYA UMA” (76,520dwt-blt ‘05, Japan), which was sold to Far Eastern buyers, for a price in the region of $12.5million”.
In the demolition market, Intermodal said that “the shadow of uncertainty casted over the demolition market in the past weeks is still very much present, with the negative impact on activity evidencing the pressure the market remains under. Saying this, there is a sense that Indian subcontinent prices have now started to resist stronger. Naturally, it is still soon to say whether a bottom is close or not given the uncertainty that still prevails in demo destinations elsewhere. Indeed, the Chinese market is still very quiet, with talk of very little activity taking place there following the end of the Communist Party Conference, which reaffirmed Xi Jinping’s presidency. The Conference together with ongoing soft demand in the Chinese market have started taking their toll on Chinese demo prices and we wouldn’t be surprised to see levels closer to $200/ldt sooner rather than later. Additionally, the already substantial price gap between China and the Indian subcontinent is currently leaving very little incentive for owners contemplating selling their vessels for scrap to do so in China. Average prices this week for tankers were at around $250-410/ldt and dry bulk units received about $240-390/ldt”
Source: Hellenic Shipping News.