Second hand vessel purchasing and demolition activity record drop on a weekly basis
Monday, 21 May 2012 | 00:00
Eurozone turmoil and the rising fears that Hellas could leave the eurozone, which would have a devastating effect according to most analysts has pushed back deals in the second hand ship purchasing markets this week. In its latest report, Golden Destiny mentioned that overall, 32 transactions reported worldwide in the secondhand and demolition market. "In the secondhand market the activity was 55% less active with 12 vessels
in total reported to have changed hands at a total invested capital in the region of US$ 159 mil (at least 16% lower than last week), and 1 transaction being reported at an undisclosed sale price. Bulkcarriers and Tankers attracted mainly the investors’ interest, while the container sector again followed. Comparing to last year’s similar period, the market is at 40% lower levels in terms of numbers of units and in terms of invested capital 83.8% less, which illustrates also the fall in asset prices" said Golden Destiny.
In a similar report, Lion Shipbrokers noted that "this week was rather slow on the s+p front with fewer sales taking place while the demo market this week was characterized by sudden dip in rates. On the dry-bulk side, Japanese controlled mid 90’s cape STAR ANGEL (170K BLT 1995 MITSUBISHI/JAPAN, LDT 21,000) is reported sold to clients of Berge Bulk of Singapore or Sinokor of S. Korea for $12.5 mill, having a scrap value close to $10 mill. We heard today that undisclosed buyers have agreed to pay $24 mill for modern panamax SHINYO ERNA (79.5K BLT 2011 COSCO DALIAN/CHINA). Having been reported sold 1 month ago to Greek buyers for $22.4 mill, modern panamax SHINING BLISS (77K BLT 2007 NAMURA/JAPAN) is again reported committed to clients of Quintana of Greece for $23.4-$23.5 mill ($1 mill more). Italian or Greek buyers have agreed to pay the firm price of $9.7-9.8 mill for nineties vintage handymax NENA A (43K BLT 1994 HYUNDAI/S.KOREA CR 4X25T), as the vessel has just passed special survey & dry-dock in Syros island in Greece last month. Clients of Brave Royal of Bangladesh have been linked with last week’s sale of 8 box hold/8 open-hatch handymax SANKO RALLY (42.5K BLT 1994 NAMURA/JAPAN CR 4X30T) for $8.9-9 mill, while this week, her one year younger sister SANKO ROYAL has surfaced as sold, also to Bangladesh buyers, for $9.2 mill (most probably en bloc sale to same buyers). Chinese buyers have purchased the open hatch handy ATLANTIC KING (27K BLT 1998/JAPAN CR 4X30T) for $8.3 mill; it’s worth mentioning that she was again reported sold at the beginning of this month for the similar level of $8.5mill to undisclosed buyers. " said Lion Shipbrokers.
It continued its report by mentioning that "in the Tanker segment, late nineties VLCC HERO I (308K BLT 1999 HYUNDAI/S.KOREA) has been purchased for storage by Singapore-based buyers at levels $26-28 mill. Greek buyers are reported to have acquired en bloc aframax sisters RAFFLES RIVER & TEMASEK RIVER (107K BLT 2004/2005 JAPAN) for $43-44 mill. Super ice class hi-spec handy unit SIDSEL KNUTSEN (22K BLT 1993 AESA/SPAIN, 12 PUMPS, EPOXY COATED, ST. STEEL COILS, BOW THRUSTER, DOUBLE HULL) has been snapped by West African buyers for $9.5 mill" said Lion.
Meanwhile, in the demolition sector, it mentioned that "the historical low of the Indian rupee against the dollar along with the overcapacity of yards (Bangladesh is almost full) & monsoon season, have led to sudden collapse of the scrap rates by $40 per lt this week in subcontinent. As Indian government is also expected to take further austerity measures, there is not any optimistic sign that market will return to higher levels soon. Cash buyers have already bought too many vessels and there is very small demand for more. Prices are ranging this week at $420-440 for bulkers, at $440-450 for tankers & at $440-450 for Tweendeckers/Containers. In other major demo-markets this week, China rates have also deteriorated, paying $360-370. Turkey is the only market that remains strong paying $350-360 per lt, reaching almost same levels as China" concluded Lion Shipbrokers.
Earlier on, Intermodal had noted that "Hellenic ship owners still occupy the top position amongst buyers in the secondhand S&P market. In its latest report, Intermodal mentioned that “since January they have managed to pick up at least 70 vessels spending over $ 1.2 billion to do so. This is a large difference when compared to the Chinese which hold second place amongst buyers’ nationality, with only 42 vessels reported purchased so far and having spent less than half the amount of that spent by the Greeks. This is even more remarkable when one considers the general lack of financing observed in shipping, let alone that available in the now illiquid Greek market”. In his note, Intermodal’s George Lazaridis stated that “all this points to the fact that Greeks continue to hold a firm belief in the shipping markets, as many of have an extensive experience of the market cycles and are used to navigating through such troubled market conditions. This does not mean that all is well and that there haven’t been or aren’t going to be casualties along the way. After all these cycles provide a cleansing opportunity, removing mismanaged companies and owners while at the same time pushing market players to remain competitive and efficient in the service they provide" he mentioned in a relative report.
Nikos Roussanoglou, Hellenic Shipping News Worldwide