Ship owners are finding it hard to assess if current tanker values are favourable or not, from a buyer’s’ perspective, while sellers are also contemplating whether current prices are good value or not. In its latest weekly report, shipbroker Intermodal noted that “last week was an interesting one for the tanker market, which following the explosion of the gas pipeline in Alabama witnessed a spike in Atlantic basin rates, with a number of owners benefiting from that incident that resulted in firmer rates. However after the restoration of the damage, rates started to soften and steadily returned to before spike levels”, said the shipbroker.
According to Intermodal’s SnP Broker, Mr. Giannis Andritsopoulos, “as far as the tanker SnP market is concerned though spikes and mini-booms have yet to be witnessed, as existing asset values have reinforced uncertainty among those who are contemplating to sell as well as perspective buyers looking to invest in preferably lower prices than those quoted at the moment. Hence, Buyers of in sizes and types are limited at the moment, moving mostly speculatively, and Sellers keep testing the SnP market to better assess the value of their respective vessels and eventually sell on a private basis, while new building activity has seen a small increase lately as well”.
On the other hand, “dry bulk newbuilding activity remains almost non-existent, which is certainly not bad for the market that has been long suffering from oversupply, a problem that could finally get under control sometime towards the end of next year, a time by which most of the order book is scheduled for delivery. This expectation together with the much healthier rates the dry bulk market is witnessing now compared to six months back, has boosted SnP activity in the sector despite the fact that current earnings might not be justifying present asset values”, said Andritsopoulos.
Intermodal’s broker added that “the recent steadying of Capesize rates has lured investments by a number of owners least expected to trade this size. The volatility Capesize prices have been historically displayed has rewarded again during the last bottoming of prices those ready to assume the risk of such an investment. Indicatively, Stealth Gas bought 2 Capes in Q1 (built in 2006 and 2008 respectively) for a total price of USD 23.5m and sold them in Q3 for USD 29.0m”.
He added that “Supramax vessels are also enjoying a 50% increase on average since the first quarter of the year on the back of strong buying interest from the Far East and the Indian sub-continent. More specifically, 15-year old Supramax is experiencing the biggest asset appreciation compared to 5-year and 10-year old candidates, while Panamaxes are witnessing a much more modest increase, calculated at around 15% for 10-year old vessels and 25% for 5-year old ones”.
Meanwhile, “potential Buyers have also been displaying a lot of interest lately for Handy size vessels and more specifically in 5-year old Chinese tonnage, which is currently being offered at around USD 6.0m, while as far as Japanese tonnage is concerned, the group of owners interested in investing here is much smaller and rather specific. We do believe this firm SnP activity in bulkers to resume at least until the end of the year and an even healthier freight market should reinforce this momentum. But irrespective if earnings manage to move much higher before the end of the year, the fact that dry bulk rates seem to be resistant to wild volatility for quite some time now has helped sentiment to shift a lot since the dark days of last spring and we all know what an important role sentiment and positive psychology play even in an industry like shipping, which is driven by fundamentals of demand/supply in an exceptional manner”, Andritsopoulos concluded.
Meanwhile, in the SnP market this past week; Intermodal said that “the momentum in SnP market remains firm in both Tankers and Bulkers, with an overwhelming number of sales of modern vessels being reported across all sizes. On the tanker side, we had the sale of the “SEAFAITH II” (109,280dwt-blt 08, China), which was sold to Indonesian buyers, for a price in the region of $12.0m. On the dry bulker side, we had the sale of the “GRAND OCEAN” (81,622dwt-blt 12, S. Korea), which was sold to Greek owner, Kassian, for a price in the region of $12.8m”, the shipbroker concluded.
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Source: Intermodal’s
