Secondhand bubble has ‘burst’
Even though tanker assets have shot up in recent months, overall secondhand ship prices are in free-fall.
The newbuilding index managed by Clarksons Research has this month gone back above the company’s secondhand index (see inset chart), a return after 19 months to more normal shipping patterns. While the two indexes are not indexed relative to one another, the chart clearly indicates how secondhand prices have come off in key sectors such as containers and dry bulk, while newbuild prices, which plateaued in October, tend to be slower to move and are still being propped up by strong forward cover at yards in Asia.
Normally secondhand prices overtake newbuilding prices only if and when there is a strong premium to having a vessel delivered immediately rather than one or two years in the future.
Commenting on the cooling off of secondhand prices, Ralph Leszczynski, global head of research at Banchero Costa, told Splash: “With the negative winds of inflation, the energy crisis and an expected recession in Europe and the US, both the container market and the dry bulk market have dropped, and with it the short-term bubble in secondhand values has burst.”
The drop in the overall secondhand price of ships comes despite asset values for LPG, LNG, crude and product carriers soaring. Analysts at VesselsValue point out that resale tonnage in these hot sectors remain above newbuilding prices.
Values for tankers have increased for all sectors and age ranges since the start of the year, data from VesselsValue shows. For VLCCs, prices for 20-year-old vessels have increased 51% from January to $38.88m. The aframax sector has seen the largest increase, with values for 105,000 dwt 20-year-old vessels having increased by 86% this year to $22.02m today.
For all the latest trends in the sale and purchase markets, check out Splash Extra’s regular Monthly Broker column.