The sign shipping has clocked onto a major bullrun is when prices for secondhand tonnage surpass newbuild prices – owners desperate for prompt tonnage will pay over the odds for ships with a shorter lifespan. That moment was met about eight weeks ago (see chart below), and the interest in sourcing all types of secondhand tonnage remains firm in July, albeit with the total volumes of concluded deals easing off a little.
“We have been waiting for the summer lull to hit and it hasn’t. We still have plenty of ships we can work for sale, the only problem being that lots of them get snapped up PDQ,” one Asia-based broker says in summing up the month’s S&P activity.
In dry bulk, cape rates were somewhat of a rollercoaster in July but ended the month at $1,280 per day higher than the start. Handy rates continue their exceptional climb, up nearly 200% from the start of the year. Concluded bulker sales did ease to a 2021 monthly low.
“Supras accounted for the majority of bulkers sold, but with low sale prices being achieved market values softened, more so for modern tonnage,” according to commentary provided to Splash Extra by VesselsValue.
Notable transactions included Thenamaris shelling out $30.5m for the 11-year-old Blue Denmark and Diana Shipping paying $22m for the 10-year-old kamsarmax Magnolia.
The weak earnings continue in the tanker sector particularly for larger tonnage, however the continued increase in steel prices has meant values are still firming across all sectors and some owners have spotted some bargains to position themselves for a possible rebound later in the year.
Notable transactions include the 14-year-old VLCC Takahashi, which was sold to NGM Energy for $34.35m while Leon Shipping and Trading was happy to pay a firm $15.75m for the 10-year-old MR1 Adara.
In the red-hot container sector, charter and freight rates continued to smash records throughout the month.
“The market remains very tight, with time charter prices continuing to firm. The recent charter price for a 14-year- old, 2,700 teu ship at $75,000 per day for a 12- to 14-month TC has set another benchmark with Pasha Group taking the lead on this,” commentary from VesselsValue states.
As a result of the market development, 27 newbuilds were ordered in July 2021 so far, an increase of 1,250% compared to July 2020 where only two newbuilds were ordered.
The secondhand market has started to slow with 22 vessels have being sold so far in July compared to 43 in May and 51 in June.
Key sales included the 8,411 teu Northern Jade and 8,814 teu Northern Julie ships – both 2005-built – sold to super acquisitive MSC in an en bloc deal for $170m. MSC also forked out $29.1m for the 2006-built, 2,824 teu Harmony N. The 15-year-old 5,060 teu S Santiago, meanwhile, was sold to OM Maritime for $58m.