Ship owners invest in twice the number of dry bulkers, compared to tankers

15 giugno 2016
A total of 234 bulkers have been traded in the S&P market so far this year, a number which is twice the amount of tankers, which haven’t exceeded 113 transactions thus far. This comes to show the lack of confidence in the tanker market’s prospects moving forward, but on the other hand it is a true testament of the investment opportunities that most owners are recognizing in the dry bulk market.

In its latest weekly report, shipbroker Intermodal commented on the buying trends witnessed in the S&P market this year, by saying that “this shows a correlation between market confidence and opportunity recognition. To be more specific there is a lack of confidence on the wet side and a clear acknowledgment of investment opportunities on the dry side despite of the dismal earnings. Literally every bulk carrier that enters the market gets sold as long as it is built post 1997. There were particular buying patterns along the past five months. At certain times Capes were the crowd’s favorites, while during other times Handysize vessels were being sold faster than freshly baked cupcakes. Buyers’ preference shifted from size to size. Bigger ships attracted buyers willing to take a much more substantial risk, as subsidizing their respective vessel/s for a longer period of time appeared to be a greater possibility compared to what it would be having bought a smaller vessel that was usually preferred by investors taking a more modest approach”.

According to Intermodal’s SnP broker, Mr. Timos Papadimitriou, “clearly the scale tips towards the geared ships when it comes to total sales. But we can see that when the BDI was at its lowest level there was a lot more activity in the Capesize segment compared to the months that the BDI started correcting upwards. At the same time Supramaxes remained popular throughout all these months and demand for Handysize vessels was also more or less steady. It is interesting to see that Panamax/Kamsarmax sale candidates started seeing a rise in interest during March and April, about the same time the dry bulk index started to rise”.

Papadimitriou wondered, “So what can we make out of this? Even though assumptions are often proven wrong in this market, one could say that buyers seem willing to bet big when they believe that the absolute market bottom has been reached and that psychology is at its worse. The steady preference on smaller ships like Supramaxes and Handies could also be perceived as a sign that buyers expect these to be the first ships to enjoy an improved market. The sudden increase in Panamax/Kamsarmax purchases right after the BDI started to rise could be interpreted as a rush to acquire tonnage before asset values move up. Let’s see how the summer months progress and how investors will react during the remainder of 2016, a year that admittedly kicked off with the worse possible signs”, he concluded.

Meanwhile, in the S&P market this past week, Intermodal noted that “no shipping event can stop a willing buyer. Despite the slight decrease in sales concerning dry bulk tonnage, SnP activity is holding overall well, with tankers sales last week displaying increased interest in the sector, inspired partly by more attractive asset prices compared to a few months back. On the tanker side, we had the sale of the “E ELEPHANT” (317,800dwt-blt 11, S. Korea) which was sold to Greek buyers, for a price in the region of $55.6m. On the dry bulker side, we had the sale of the “GALAXY DREAM” (181,371dwt-blt 13, Japan) which was sold to Singaporean owner, Winning, for a price in the region of $27.5m”, the shipbroker concluded.
Source:  Hellenic Shipping News Worldwide