27-05-2016

Low asset prices, scarce financing boost secondhand dry bulk vessel sales

DB

Flagging asset prices and limited financing in the dry bulk shipping market have resulted in a spike in the secondhand sale of Supramax and Handysize vessels, a shipbroking and research house said Thursday.

The number of resales of Supramax and Handysize dry bulk vessels has more than doubled year on year during the first five months of 2016, data from Athens-based Intermodal Research and Valuations showed.

A total of 82 vessels in these categories have changed hands to date this year compared with 39 in the same period last year.

Handysize vessels range in size from 20,000 dwt to 40,000 dwt and Supramax size vessels from 50,000 dwt to 60,000 dwt.

Dwindling asset prices are fueling interest in older tonnage among shipowners, Intermodal said.

While there has been a lot of interest in Supramax and Kamsarmax size ships built during the last decade, buyers were also looking with increased interest at vessels built around the end 1990s/early 2000s, which was not the case in the recent past, said Intermodal sales and purchase broker George Iliopoulos.

“To put things in perspective, a 2000 built Handymax with [special survey and dry docking] was sold at around $2.9 million at the beginning of March and a similar ship today could easily fetch $3.5 million or more, which translates to a 21% increase,” he said.

Intermodal researcher Eva Tzima said the limited financing available to shipowners currently was also fueling the interest in older and consequently cheaper vessels. Shipowners still benefit from rising values for older vessels even though returns were greater for younger vessels, she added. “The vastness of the dry bulk trade in terms of the number of ports and commodities cannot be just serviced by modern tonnage when you look at commodities other than iron ore and steel,” Tzima said.

Supramaxes and Handymaxes have proven extremely resilient in terms of finding employment — their cranes and smaller size enable them to dock at less developed ports.

They also service commodities like grains, for which seaborne trade has not been negative, and the parcel sizes they can accommodate are still preferred by a lot of charterers, Tzima added.

Around 70% of the current Handymax fleet and 27% of the Supramax fleet was built prior to 2007.

Very few older Supramaxes and Handymaxes have been scrapped, indicating owners were still able to find value, said Tzima, adding the two segments have not seen a decline in fixing activity.

Source: Platts

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