In Hellenic Shipping News 29/06/2017
Second hand dry bulk vessel transactions plunged by 41% during the second quarter, compared to the first three months of the year, as ship owners refrained from more deals. In its latest weekly report, shipbroker Intermodal said that “from the beginning of the year until now SnP activity has changed significantly. To put things into perspective, after a fast and furious q1 on the dry bulk side, which counted 219 bulk carriers transactions, a rather sluggish q2 followed with 130 transactions, translating to a 41% decrease. Currently as we are approaching the end of June, we can say that buyers and investors have switched more into a reflection mode, contemplating whether and when they should buy or sell again. Some are looking to flip ships they bought cheaper and others wait for second-hand prices to keep pointing downwards and move to more attractive levels”.
According to Intermodal’s SnP broker, Mr. Timos Papadimitriou, “in the meantime the one factor that appears rather consistent between the first and the second quarter of the year is the hire market. Indeed, with the exception of Capesize rates that are today 58% down compared to year highs, averages earnings for all other sizes are more or less faring around 2017 average levels. Capesize market aside, there is comfort in this consistency as it also evidences stability and of course stronger resistance formed by owners. Saying that, I believe that this consistency was somewhat already priced in Buyers’ expectations during the past months and it can’t provide additional steam to asset prices at this stage”.
Papadimitriou said that “the fact that ships are not operating any more at sub-OPEX levels as they did during the better part of the 2016, is indeed encouraging for a lot of owners who contemplate buying, but the decisive factor is purely the overall picture that the fleet has. Regulations, not excessive orderbooks and lack of financing, are all factors highly anticipated to start having an impact on the supply and demand equilibrium between cargoes and vessels”.
According to Intermodal’s analyst, “currently there is still overall decent movement on the SnP side. Buyers are inspecting and offering but there is a lot of restrain as far the levels at which respective vessels should be attained and how aggressively this marketed tonnage should be pursued at and in a way it makes sense that this sort of discipline is demonstrated. Second-hand prices only rose earlier this year because perspective buyers were willing to offer and compete on tonnage. Now there is no such desire, at least not to the extent that there was before. Until the hire market moves up to levels that have not been reached during the past 6 years, Buyers will continue being the ones that dictate prices and with the exception of mid-spring, this trend has been very clear during the year so far”, he noted.
Papadimitriou added that “sellers have made a few attempts to push prices higher especially on larger vessels. It started on the Kamsarmax / Panamax size where the price of a 5 year old flirted with levels of the respective newbuilding. The moment a non-eco Kamsarmax deal was close to the prices of a 2018 slot, buyers started to hold back with military discipline. During the same period, Capesize asset prices on reported deals, although still far from newbuilding price levels, also inspired Sellers to ask for more but Buyers held back in this instance as well. We can list concluded deals and recent sales as well as failed sales and ships that are not sold for months, but the bottom line stays the same. This is, and will remain for the better part of the remaining years of this decade purely a buyers’ market, at least on the Dry Bulk side. This is not necessarily bad of course. After all, in a market that the hires are not super healthy, it’s good to know that there is still some control in the hands of the owners”, he concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
