By Vasilis Moiris
This has been another active week in the second-hand market for both the dry bulk and tanker sectors. Buying interest has recently increased, which is evidenced by the numerous transactions being concluded lately. We are seeing an increased number of vessels being inspected and a substantial number of vessels also being negotiated as we speak.
In the dry bulk sector and in view of the recent increased supply of market candidates, we are seeing a slight softening in values despite the satisfactory freight rates. The period market has not been as firm as in the previous weeks, but we notice that owners feel reluctant to fix their vessels amidst a sideways/slightly negative performance of the freight market.
The same reservedly optimistic sentiment is also evident on the SnP side. We are noticing that a number of buyers are keen to acquire a vessel, with focus on those built 2008 onwards. Greek buyers have been very active, particularly in Supramax sector, as they still see values at attractive levels.
Following three rounds of inspections, the ‘MAEMI SPIRIT’ (53,482dwt-blt ‘08, Japan) is now reported sold to Greek buyers for a price in the region of $11.2m, a level significantly lower than the $13.05m the ‘NIKKEI DRAGON’ (52,950dwt-blt ‘09, Japan) managed to obtain the prior week. In the Kamsarmax sector, Greek buyers are reported to have bought the ‘PRIME LILY’ (81,507dwt-blt ‘12, S. Korea) for a price in the region of $20.6m, basis delivery Atlantic, which would justify the premium on price and we compare this to the ‘JAG ARYA’ (81,000dwt-blt ‘11, S. Korea), which was sold to Greek buyers, for a price in the region of $18.95m a few weeks ago.
In the tanker sector and in view of the recent increase in freight rates, particularly on the crude side, buying interest is now becoming more apparent. Two Aframaxes the ‘DHT CATHY’ (119,928dwt-blt ‘04, S. Korea) and the ‘DHT SOPHIE’ (112,045dwt-blt ‘03, S. Korea) have been sold for a price in the region of $12.4m and $11.9m respectively to Greek buyers. A number of similar aged ships are now inviting offers and we expect to report more on them within the next couple of weeks.
As far as MR tankers are concerned, the ‘NORD INNOVATION’ (47,981dwt-blt ‘10, Japan) has been sold for a price in the region of $17.2m to Turkish buyers (c/o Densay) after seven buyers inspected her in Rotterdam. The fact that the vessel will be delivered with surveys passed and BWTS installed has affected her final price that is higher compared to the last done.
Additionally, we are noticing that banks are also becoming more optimistic on the tanker sector with increasing talk of financing for bigger vessels as well, possibly seeing the same opportunities they saw on the dry bulk side when the sector was slowly coming out of its lows in the not-too-distant past.
One thing is certain, the SnP market will maintain everyone’s interest vivid in the coming winter and it looks like buying opportunities are still present in both sectors.
Chartering (Wet: Firm+ / Dry: Soft-)
Pressure in the Dry Bulk market resumes, with Capesize losses pointing to further BDI weakness in the short term. The BDI today (06/11/2018) closed at 1,395 points, down by 33 points compared to Monday’s (05/11/2018) levels and decreased by 118 points when compared to previous Tuesday’s closing (30/10/2018). The crude carriers market remained positive last week, building up owners’ expectations for the following weeks and the traditionally busy winter season ahead. The BDTI today (06/11/2018) closed at 1,116, decreased by 34 points and the BCTI at 608, an increase of 41 points compared to previous Tuesday’s (30/10/2018) levels.
Sale & Purchase (Wet: Firm+ / Dry: Stable+)
The love for tankers is quickly building up in the SnP market that has seen another generous round of sales in the sector during the past week, while Greek Buyers continue to display very healthy appetite for both tankers and bulkers. On the tanker side sector we had the sale of the “EUROPEAN SPIRIT” (151,848dwt-blt ‘03, S. Korea), which was sold to Greek buyers, for a price in the region of $15.7m. On the dry bulker side sector we had the sale of the “SCANDINAVIAN EXPRESS” (93,038dwt-blt ‘10, China), which was sold to Greek owner, Lavinia, for a price in the region of $15.8m.
Newbuilding (Wet: Stable+ / Dry: Stable+ )
Healthy activity resumed in the newbuilding market, with recently reported orders revealing steady interest in the tanker sector. Although price details in the most recent deals have not been reported so far, we won’t be surprised to see slightly higher levels sooner rather than later as demand for newbuildings remains very firm in the sector. Additionally, the improvement in the freight market that could sooner rather than later result in higher secondhand values could give an extra push to the newbuilding wave as prices – despite any upside this year – still remain at historically attractive levels. In terms of recently reported deals, Taiwanese owner, Evergreen, placed an order for four firm and four optional Sub-Panamax containers (2,500 teu) at Jiangnan Shipyard, in China for a price in the region of $28.0m and delivery set in 2020.
Demolition (Wet: Stable- / Dry: Stable-)
The demolition market continues to see overwhelming activity with an impressive number of deals surfacing for yet another week at very good prices, while despite the shaky currencies in the Indian subcontinent it seems that appetite among cash buyers in the region remains high indeed. What is more notable though in the past couple of weeks is the significant drop in tanker candidates in the market and the simultaneous increase of container sales. With the tanker freight market having noted impressive upside during the past weeks, it seems that owners of more vintage tonnage that were previously considering scrapping their vessels have moved to the sidelines for now, possibly considering the trading option for a little while longer. Representative of this trend is the slowdown in VLCC scrapping, with only five sales recorded since the beginning of September, evidence of the improving fundamentals for the size that has seen intense demolition during the first half of the year. Average prices this week for tankers were at around $180-455/ldt and dry bulk units received about $170-440/ldt.
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