Shipping Market Insights: George Iliopoulos

21 May 2018

Half-way through the second quarter of the year and as the Posidonia week approaches everyone is getting ready for this unique gathering that besides the exhibition includes a number of conferences, receptions and events that will once again be attended by a truly international crowd. While the preparation fever is expected to hold, market developments keep taking place on the dry bulk side, with activity so far in the year shaping expectations for what could be probably coming ahead as well. Since the beginning of 2018 we count around 230 second-hand sales on the dry bulk sector, which is a healthy number indeed, while newbuilding contracting has also seen steady numbers.

Out of those 230 bulkers that changed hands during the past months, 100 where built in China. Most of the buying interest focused on Handysize up to Ultramax tonnage, with this dwt range counting 160 sales. Indeed buyers where showing much more interest in inspecting such vessels compared to Panamaxes and Capes.

A 2007 built Handysize vessel for example had lured the interest of 6 different buyers, while during the same period a ten year old Panamax had only seen interest by three parties. This also explains why Handysize asset values have been moving upwards during the past two-three months. We recently saw a 38kdwt non-Japanese bulk carrier built in 2011 being sold for USD 11.3 million and a 33kdwt Japanese unit built in the same year fetching more that USD 15 million. Both these prices are indicative of the increasing popularity Handysize vessels above 33kdwt are currently enjoying.

Interest has also been witnessed for Supramax/Ultramax candidates. Chinese built Supras in particular have witnessed a lot of activity, with prices inching up as a result compared to the beginning of the year. Japanese tonnage of this deadweight range has also been popular. The Supramax second-hand market has been somewhat split in two different categories, both enjoying firm momentum. On one hand small Supras (50-52kdwt) built in the early 2000’s that were sold to Chinese owners just in time for CCS import and on the other hand bigger vessels (55dwt+) built during the years 2006-2012 that have been particularly popular as well. A representative example of the later is the sale of the M/V DARYA VISHNU (56kdwt, blt’ 06 Japan that was sold for a price in excess of USD 13 million. About a year ago a sister ship of the M/V DARYA VISHNU had fetched circa USD 10 million, while the same vessel was sold at the end of 2017 slightly above USD 11.5 million.

Depending on the condition of the vessel and its respective surveys position, the appreciation in Japanese Supramax vessels since the beginning of the year is calculated at around 20%. It will also be very interesting to see how asset prices for Japanese Supras built 2009 onwards will shape given the fact that there are very few candidates fitting the above description. We recently saw the M/V EM SAPPHIRE (54kdwt, blt ’09 Japan), one of the very few candidates within this age range, being sold close to USD 15 million.

Prices appear to be on the rise again and the performance of the freight market during the summer season will definitely help shape expectations for the last quarter of the year.

Source: INTERMODAL RESEARCH & VALUATIONS/ COALSPOT