Fearnley calls the bottom of the offshore market

Fearnley Offshore Supply has called the bottom of the market and is seeing strong action in the offshore  S&P markets.

The Norwegian analysts reckon in their latest quarterly report, the offshore sector is currently in a “very tense and exciting part of the downcycle in a notoriously volatile market”.

Sale and purchase activity over the past quarter was described as “buzzing” with plenty more in advanced stages of negotiations.

“Unfortunately for the owners, this activity is mainly driven by the substantial discounts that they are currently offering the market rather than an increased demand for ships. Cash is king, maybe now more than ever,” Fearnley reported.

The end-result being very attractive opportunities for speculative buyers with cash on hand. Asian workhorse AHTSs with 5,000 BHP due for second special survey have been sold for as little as a few hundred thousand dollars.

“Irrespective of vessel size acquired, the new owners are gaining a substantial advantage towards their margins from a capex point of view. Presently, there are very few available second hand fire sales in the market, and buyers looking for bargains right now are struggling to identify them,” Fearnley reported.

The lack of immediately available candidates are turning some of the keener and more speculative buyers towards China and the opportunities for newbuild resales there. Hundreds of complete or close-to-complete ships are sitting quayside at Chinese shipyards looking for homes.

In the subsea sector, Fearnley registered an increased demand for IMR and LCV tonnage for both immediate and future operations while for both the floater and jack-up segments have seen demand pick up.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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