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Second Hand Vessel Deals Down 50% So Far This Year

The second hand market for ships has declined to just $7 billion, versus $13.5 billion in the same period of 2022. In its latest weekly report, shipbroker Xclusiv said that “the global economy is holding its breath as two American banks, Silicon Valley Bank & New York’s Signature Bank collapsed withing the past three days. US authorities raced on Sunday to stem jitters about the health of the nation’s financial system, pledging to fully protect all depositors’ money while also giving any banks squeezed for cash easier terms on short-term loans. Authorities are aiming to strengthen confidence in the banking sector and avoid any spill over effects. How and for how long these collapses will affect economy and whether there will be aftereffects for the shipping industry and finance are yet to be seen”.

Source: Xclusiv

Meanwhile, “back to the shipping industry, the SnP market is still trying to find its footing within 2023, as both the quantity and value of SnP transactions have decreased by approximately 50% compared to same time last year. (2023: 240 sales – 7 billion USD worth / 2022: 485 sales – USD 13.5 billion worth). Focusing on bulk carrier and tanker trades, there is a 48% y-on-y decline in bulk carrier transactions & 38% decline in tankers. However, the value of tanker SnP transactions in 2023 until today, is up by 14% year-on-year (from $3.1 billion to $3.54 billion) reflecting the firm tanker freight rate market and appreciated vessel values. The demand for vessels is three times greater than the supply of vessels in the bulk carrier SnP market. 60% of the vessels available for sale are supramaxes & handysizes, & 60% of the vessels are 11-15 years old. There is a considerable demand for vessels from buyers, and there are other parties trying to profit from the market’s fall.

The Handysize, Supramax, Panamax, and Kamsarmax sizes receive the majority of enquiries, and most buyers are looking for vessels between the ages of 6-20. The most popular vessels are Kamsarmaxes, Supramaxes & Handysizes between the ages of 11-15 as well as 6-10y old. Buyers are primarily drawn to vessels between the ages of 11-20 in the tanker SnP market. It’s remarkable to note the significant interest in vintage ships, particularly in the VLCC size, where we observe that nearly half of the enquiries are for ships that are more than 20 years old. About half of all enquiries concern chemical and small tankers (those under 30,000 dwt), and another 25% of all enquiries concern MR1 and MR2 tankers. The vessel supply is constrained from the seller’s perspective; over 65% of the entire supply are ships that are between 11 and 20 years old. According to vessel sizes, more than half of the vessels for sale are small & chemical tankers (less than 30,000 dwt), and it’s important to note that less than 10% of SnP market enquiries are for vessels in the VLCC and Suezmax classes”, the shipbroker said.

Source: Xclusiv

“While the dry bulk rates enjoy their 5-digit trajectory, with the Capesize, Panamax and Handysize levels touching levels not seen since mid/late Dec 2022 and the Supramax having returned to mid-Nov 22 rates, signs are positive especially for the small segments. According to analysts, despite heavy rain that has delayed Brazil’s soybean harvest, with exports being 31% down y-o-y during the first 2 months of 2023, the country’s exports are expected to increase sharply in the coming months as Brazil is on track for a record harvest, forecasting that this year’s soybean harvest to reach 152.9 million tonnes, up 21.8% compared to 2022. China seems to be back in the game despite its announcement of the lowest GDP growth target in decades. During the first 2 months of 2023, China’s coal imports soared 71% to 60.64 million tonnes compared to one year earlier, as utilities rebuilt stocks to meet higher demands after abandoning its zero-Covid policies”, Xclusiv concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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