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Limited appetite

Ship sales have been thin on the ground in August

It’s been a quiet month on the sale and purchase scene as the VesselsValue graph below clearly shows.

“We can expect asymmetries in both price levels and volume of transactions to hold,” Allied Shipbroking said in a recent report, summing up the scared mood among buyers and sellers in this Covid-19 year.

Assuming the world does not go into another lockdown, September is primed to be far busier as there is a huge swathe of ships coming to the market.

Japanese sellers have been the most active in August. The vessels that were not sold in the first half of the year have meant a higher volume of ships coming now.

The handysize sector has the smallest bulker newbuilding orderbook to fleet ratio

Just 24 bulkers were sold around the world in August. Total spending on secondhand bulk carriers is down $211m compared to the same month in 2019.

Handy bulkers were the most transacted bulker type with 11 sold. Handy earnings have continued upwards from their May lows, starting August at $6,529 per day and finishing at $8,015 per day.

Of all the dry bulk segments, Greek brokerage Intermodal analysis shows the handysize sector has the smallest newbuilding orderbook to fleet ratio, while supramax and ultramax vessels portray similar overall trends, governed by a low newbuilding tonnage supply coupled with a high number of vessels aged greater than 20 years of age.

Notable bulker transactions this month include the sale of the 13-year-old Lowlands Erica cape, bought by Greece’s Alberta Shipmanagement for a very firm $15m.

Iran Ofer’s Eastern Pacific Shipping exited the handysize segment, selling three Japanese-built, 28,000 dwt units.

The 2011-built Westgate and Stargate have gone to Greek interests for close to $7m each, while the 10-year-old Crystalgate was taken by Vietnamese interests for just over $6m.

Tankers were the most transacted ship type this month with a total spend of $557m and eight deals confirmed, although this is still low at one third of the spend seen in August 2019.

Tanker rates have weakened across the market. VLCC and suezmax rates have both dropped 20% to $15,397 per day and $10,787 per day respectively. MR rates are the only ones to show any improvement over the month increasing by 19% which has led to a slight firming in values.

Notable tanker sales this month include the quartet of new VLCCs – V Prosperity, V Glory, V Harmony, V Advance – sold to SK Shipping for $356m. The deal includes a time charter of 10 years at $30,000 per day, plus a five-year option to GS Caltex.

Containership sales activity have been very slow with total spending this month down 85% year-on-year according to VesselsValue.

Singapore shipping trust First Ship Lease Trust (FSL) exited the sector with the sale of its last three containerships FSL Eminence, FSL Elixir and YM Enhancer. The 6,350 teu ships were sold en bloc for $24.6m.

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