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Written by Perter Clarkson Wednesday, 08 April 2009 03:31
Prices of secondhand bulkers have plummeted to as low as half the level reached during the peak season around summer 2008 due to the slump in the dry market.
With newbuildings now on order in a massive volume, it is almost impossible to expect an immediate drop in newbuilding prices.
Thus, Japanese operators show interest in acquiring secondhand ships whose prices have already been slashed. However, a Japanese operator commented that the prices are still relatively higher than their envisioned level, so they are thinking twice about buying secondhand ships.
Japanese operators usually use only bulkers up to 15 years of age.
With this, they would buy secondhand ships completed in/after 2000 so that their remaining life would still be long.
In the first half of 2008, when record-high levels were posted in the dry market, prices of secondhand ships completed in/after 2000 skyrocketed to more than $70 million for a Handymax and above $80 million for a Panamax. Dry market rates in the first half of 2008 averaged $70,000/day for Panamaxes. Had that level lingered, the ship price of $80 million could have been recovered in just four years.
However, the sale/purchase of secondhand vessels totally stopped in the fall of 2008 due to the explosive plunge in the dry market and the credit crunch. Thereafter, cash-laden overseas shipowners were moving toward buying secondhand ships and concluding sale/purchase deals, but ship prices dipped to less than half of the level recorded in the first half of 2008.
Japanese operators are also showing interest in buying secondhand ships, saying that, "Rather than newbuildings whose prices do not drop right away, secondhand vessels have more possibilities." However, they feel that the current ship prices are still relatively high, claiming that, "Based on our policy of using only vessels aged up to 15 years, the costs are still rather high, so we cannot afford to actually buy."
Further, operators are reinforcing their drive toward off-balance sheet deals in a bid to improve their free cash flow. An operator said that, "Even if we do decide to acquire secondhand ships, we will not buy them on our own but will charter them from external owners."
http://www.vinamaso.net/news-events/shipping-logistics/still-high-bulkers.html
