The value of ships owned by German companies is set to increase by over US$5Bn, over the next 2 years, says VesselsValue.
Varied portfolio
Its analyst Court Smith commented “Market returns have been stronger than expected even in the face of tariff headwinds as the fleet size rationalisation over the past several years has improved the earnings prospects of the ships on the water. Rising replacement costs due to firmer asking prices from shipyards are also boosting the price of existing assets on the water.”
The current ownership profile is spread across all sized container ships, but the highest concentration of German ownership is in the post-panamax segment.
German shipowners hit
Mr Smith said that asset sales by German owners have slowed in 2018 as weaker market participants have already sold their assets. He added “The positive trends being seen in the valuation of ships should stop German owners from rushing to the exits as quickly as they did in 2016 and 2017.
Oversupply remains a concern in the ULCV segment in particular, and the forecasted value for these 33 ships may not follow the wider upward swing in container ship asset values. The sale of purchase history for these large ships is not well established, nor is the expectation of service life.”
Diversify assets
He said that there may still be willing sellers who are looking to diversify their asset plays outside of the container markets, and the positive price appreciation should not discourage them.
He commented, “It is far easier to find a buyer for a ship in a rising market, before the upside gains are fully realised and there are fewer counterparties willing to buy at the top of the market.”
He further added, “Global economic growth remains uncertain in developed countries due to self-imposed restrictions on trade in many large economies, but for now the effects have been muted. The long-term trends in global growth should continue to support asset prices as the supply and demand balance between ships and cargo grows tighter on some service routes.”
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Source: Container Shipping & Trade
