By Costas Hardalis
It seems that what most of potential buyers expected to happen and many tried to push seller towards that direction between March and May 2020 has to be postponed for nobody knows how long. Second hand dry bulk vessel prices did not even approach 2016 levels despite daily earnings were same as to that time, while in some instances increased bunker prices coupled with ballasting vessels resulted in even bigger loses for owners compared to 2016 levels.
The lowest recorded price levels in the SnP market this year for each segment were:
MV Clipper Kamoshio (32kdwt 2009 Kanda // DD due 07-2020) for USD 6,75m to Vietnamese.
MV Royal Epic (56kdwt 2008 Mitsui // SS&DD due 04-2021) for USD 7,8m to Indonesian.
MV Paganini (75kdwt 2008 / Hudong, China // DD due 04-2021) for USD 8m to Greeks.
MV Lancelot (177kdwt 2010 New Times // SS&DD due 08-2020) for USD 16,3m to Chinese.
We did not see any sale of post 2010 units and bigger sizes (Japanese built ranging from Supramax to Capesize) while only several Handies 28k & 32k dwt have been committed. However, small-sized asset values have remained low for several years; this suggest that correlation between small and large vessels may be hard to achieve anymore. With the BDI being posted at 1710 points and both Capesize and Kamsarmax average earnings were at $25,000 and $13,500 per day respectively as of 17th July 2020, an increase in the SnP market activity has been observed. At the same time, interest remains high despite both buyers and sellers having to compromise with Covid-19 clauses while a subsequent upside to asset values is more than likely if the current positive momentum continues.
Some notable sales that took place since market rebound are:
Regarding the M/V New Stage (176kdwt 2008 Namura), in early May the best offer Sellers saw was just at USD 14m while now she was sold in the low 16m to Greek buyers. The two-year younger MV Gracefull Madonna (180kdwt 2010 Koyo) has been sold for USD 20,5m to Eastern Pacific.
Several kamsarmax vessels have changed hands recently. The M/V KM Yokohama (83kdwt 2011 Sanoyas // DD due 05-2021) after being inspected by 7 parties in Hamburg she was committed to Greek buyers for USD 15m. Both BW Einkorn (81kdwt 2010 Universal) & BW Barley (83kdwt 2010 Sanoyas) have been sold enbloc for USD 14m each to Greek buyers while the BW Acorn (82kdwt 2010 Oshima) has been sold to German Buyers for USD 14m.
In the Supramax sector, Mimi Selmer (55kdwt 2005 Mitsui // SS&DD due 10-2020) has been sold at USD 7,5m a value well above from the USD 6,5m that her sister ship Helene Selmer (55kdwt 2005 SS&DD due 09-2020) sold 3 weeks ago. Owners of Bulk Paraiso (53kdwt 2007 Iwagi // SS&DD passed, BWTS installed) in early June invited offers with the highest that they received being at around USD 7m. However, this past week owners managed to fetch a price at USD 8m for this unit.
Chartering (Wet: Stable- / Dry: Stable-)
A market of two directions for the dry bulk vessels with bigger sizes losing ground while their geared counterparts enjoyed a positive week. The BDI today (21/07/2020) closed at 1594 points, down by 84 points compared to Monday’s (20/07/2020) levels and decreased by 148 points when compared to previous Tuesday’s closing (14/07/2020). Both VL and Suezmax rates faced additional pressure while sentiment in the Aframax market improved the past week. The BDTI today (21/07/2020) closed at 541, increased by 49 points and the BCTI at 350, a decrease of 11 points compared to previous Tuesday’s (14/07/2020) levels.
Sale & Purchase (Wet: Stable+ / Dry: Firm+)
Activity in the Sencondhand market maintained its volumes; Buyers continue to focus on the dry bulk segment with Kamsarmax size having the lion’s share amongst recently reported deals. In the tanker sector we had the sale of the “BERGINA” (105,839dwt-blt ‘07, Japan), which was sold to Chinese buyers, for a price in the region of $19.0m. On the dry bulker side sector, we had the sale of the “KM YOKOHAMA” (83,480dwt-blt ‘11, Japan), which was sold to European buyers, for a price in the region of $15.4m.
Newbuilding (Wet: Stable- / Dry: Stable-)
The murky outlook in the Newbuilding market continues to raise concerns among the industry participants that saw another week of soft activity in the contracting front, while the recent dry bulk orders at New Dayang from domestic owners, are evidence of the appetite Chinese investors are still displaying for Dry bulk new vessels. Indeed, preliminary data for the first half of 2020 contracting activity are showing that more than 50 percent of dry bulk orders concern exclusively Chinese buyers with Japanese interest representing close to 20 percent of dry bulk newbuilding projects since the start of the year. In terms of recently reported deals, Chinese owner, Zhejiang Shipping, placed an order for two firm Supramax vessels (51,000 dwt) at New Dayang, in China for a price in the region of $20.0m each and delivery set in 2022.
Demolition (Wet: Firm+/ Dry: Firm+)
The positive momentum on the demolition front continued the past week with higher scrap prices being noted across the Indian subcontinent while the Turkish market has finally showed some signs of improvement on the back of increased local steel prices. Pakistan remains the best demo destination with average prices standing at 320/ltd and 330/ltd for Dry bulk and Tanker units respectively. Bids coming out of Bangladesh also picked up last week, however with yards in the region being under stringent banking regulations related to Covid-19 virus spread the pricing gap between Bangladeshi breakers and their Pakistani counterparts remains. As far as the Indian market is concerned, Rupee continued to rise for the 3rd day in a row against US dollar helping breakers in the region to offer improved prices for owners who are willing to dispose their units. Average prices in the different markets this week for tankers ranged between $180-330/ldt and those for dry bulk units between $175-320/ldt.
Please click here to open Intermodal's Weekly Market Report for the week 29,2020