Profits on ships being sold today can cover the losses made by the ship over its lifetime
Secondhand deals for red-hot containerships have jumped more than 100% in the first half of the year, new data from BIMCO shows.
With charter and freight rates at record highs, liners have been scrambling for tonnage. Charter prices are increasingly onerous. Charter rates are currently 27% above the 2005 peak with three-year periods now the norm for vessels down to 2,500 teu and even five-year terms now being agreed for these smaller ships in recent days.
The stunning doubling of sales concluded in the opening six months also highlights shipping’s ability to asset play.
“From the seller’s perspective, the current prices offer a great incentive to sell, highlighting the role of asset play in some shipowners’ models, as profits on ships being sold these days can potentially cover the losses made by the ship over its lifetime,” commented Peter Sand, BIMCO’s chief shipping analyst.
During the first half of 2021, a total 277 containerships have changed hands, a 103.7% jump from 136 ships bought and sold in the same period of 2020, according to VesselsValue. A total of 922,203 teu found new owners, with an average ship size of 3,403 teu.
By far the most traded ship so far this year have been feeder ships, of which 167 have been sold, a 165.1% increase from the first half of 2020. Of the feeder ships which have disclosed prices, the average paid in June was $17.6m. This is more than four times the $4m average for deals going through in June 2020.
“Carriers’ options for getting hold of extra tonnage in the short term to meet current demand is limited to the charter and secondhand market. The former is getting progressively more expensive and harder to come by as available tonnage is quickly snapped up, leaving the option of buying in existing tonnage. Currently, both options come at a premium,” Sand said.
Noticeably for both charter and secondhand acquisitions buyers are taking tonnage further and further out. Mediterranean Shipping Company (MSC), which has been the most aggressive buyer, buying an unprecedented 70 ships since last August, including the recent eye-catching deal for the 19-year-old 4,839 teu Mexico, which the Swiss liner paid a stunning $50.5m for, and bought it on the basis of a forward delivery in April 2022.