A leading sale-and-purchase shipbroker is predicting more volatility ahead after a strong first six months for deals.
Toby English, global head of S&P at London shop Simpson Spence Young (SSY) said activity had continued almost without pause in the dry bulk and container sectors so far this year.
Tankers also saw a boost in interest as rates rose due to the Ukraine war and newbuilding options remained limited.
This has applied equally to older and more modern tonnage, English said.
“As we embark into the second half of 2022, all the signs are there that we should continue to see an interesting second-hand market in the various sectors,” he added.
And the broker said: “Of course, current global developments divide opinion in terms of where the various markets are heading, which may mean corrections in some markets and price increases in others.”
English will be watching to see how the volatility, both in markets and opinions, influences developments in the S&P sector in the coming months.
He noted an increase in both interest and pricing for aframaxes and LR2s, particularly for ships suitable for loading in Russia’s eastern port of Kozmino.
“As sanctions have become tighter and more restrictive on Russian exports, ships and banks, the sustained rates in the smaller sized units have given a new lease of life in other segments — from handies to suezmaxes — and we have seen a heightened level of charter rates both on the spot and term,” the broker explained.
At the start of the year, three-year charter rates for eco MRs stood at $16,500 per day.
More recently these numbers have been in the low $20,000s.
To sell or fix?
“The positive push in rates has firmed up sentiment in the tanker sale-and-purchase market across most sizes, with owners increasing their price ideas for sale or withdrawing units from the market as they fix vessels on time charter or for firm spot rates,” English added.
At the start of 2022, the owner of a 2007-built Japanese aframax could expect to bank $17.3m from a sale.
But over recent weeks 2007-built ships have fetched above $25m and 2009-built units towards $28m.
Even sentiment in the beleaguered VLCC sector is improving, English argues.
General optimism
“There is a general level of optimism for the VLCC market as we move into the second half of the year,” the broker said.
“This has also been reflected in recent sales of modern tonnage at increased levels for the limited tonnage that becomes available,” he added.
Any owner brave enough to ask for a quote at a shipyard is being told a new VLCC will cost more than $120m.
“Despite the cooling off in the container markets, we expect berth availability to remain tight for tanker tonnage, with limited options in both China and Korea,” English said.
Allied Shipping Research has tallied total S&P deals worth $22.5bn so far this year.
Nearly 350 tankers have changed hands in the period.
