Source: Maritime Executive
November 28th 2016
Sales of second-hand ships used to haul commodities such as iron ore, coal, grain and fertilizer have hit a seven-year high in 2016 as the industry creeps out of an eight-year downturn that has sunk several fleets of shippers.
Seaborne transport, which accounts for 85 percent of global trade, has seen a tentative recovery in the rates shippers charge to carry dry-bulk cargoes, which has encouraged buyers to jump at the bargain prices for second‑hand vessels.
Nearly 560 such dry-cargo ships, which as a class make up half the world’s merchant fleet, have changed hands in deals worth $4.3 billion up to the end of November, data from shipbroker Clarkson showed, the highest number since 2009.
“We’ve seen a lot of interest from Asian buyers in 10-15 year old ships, which is partly due to the surge in rates,” said Ziad Nakhleh, managing director of Greek owner Teo Shipping Corporation.
“Mineral demand from China is one of the bright spots for dry bulk,” he said.
Teo Shipping has put a 15-year old 74,107 dwt Panamax bulk carrier called the Cretan Wave up for sale at a price tag of $4.65 million, according to the nautisnp.com website.
It is one of thousands of dry cargo ships on the market at traditional and online brokers.
“We believe the sector is approaching a turning point after a long period of depressed rates,” said Aristides Pittas, chairman and chief executive of dry bulk owner Euroseas, which has recently agreed to buy the Capetan Tassos, a 16-year old 75,100 dwt bulk carrier for about $4.4 million.
After crashing to its lowest level on record earlier this year, the Baltic Dry Bulk Index, a basket of freight rates to transport dry raw materials like iron ore, coal and grain, has soared over 300 percent to 1,257 points, albeit still way off its almost 12,000 point peak from 2008.
“It does make more financial sense to buy second-hand at the moment than order newbuilds, given the very attractive prices,” said Ralph Leszczynski, head of research at ship broker Banchero Costa (Bancosta) in Singapore.
A five-year old 180,000 dwt iron ore and coal carrier costs around $24 million now compared with $39 million in 2014. A 10-year-old, 32,000-tonne ship to carry fertilizer, logs or steel products is worth around $6.8 million now against $12.5 million two years ago, according to data from shipping services firm Clarkson.