Hellenic ship owners still occupy the top position amongst buyers in the secondhand S&P market. In its latest report, Intermodal mentioned that “since January they have managed to pick up at least 70 vessels spending over $ 1.2 billion to do so. This is a large difference when compared to the Chinese which hold second place amongst buyers’ nationality, with only 42 vessels reported purchased so far and having spent less than half the amount of that spent by the Greeks. This is even more remarkable when one considers the general lack of financing observed in shipping, let alone that available in the now illiquid Greek market”.
In his note, Intermodal’s George Lazaridis stated that “all this points to the fact that Greeks continue to hold a firm belief in the shipping markets, as many of have an extensive experience of the market cycles and are used to navigating through such troubled market conditions. This does not mean that all is well and that there haven’t been or aren’t going to be casualties along the way. After all these cycles provide a cleansing opportunity, removing mismanaged companies and owners while at the same time pushing market players to remain competitive and efficient in the service they provide.
Furthermore and despite the poor charter rates and subsequently the earnings that are present in most of the shipping sectors, a plethora of investment opportunities in the shipping industry are still available for shipowners. This is all the more true now that prices have dropped significantly from the comparably high levels of last year and at their current levels, seem to more accurately reflect the level of earnings. All this allows for a more viable investment return on any secondhand purchase. Yet the trouble still remains in terms of financing. Due to the overall absence of ship finance, in the majority of cases, shipowners must rely on their own cash reserves to support any new investment decisions. This inevitably has left most of the shipowners who were more conservative in their past investment choices and entered the crisis with limited debt exposure, at a great advantage. These owners have not only managed to raise significant cash reserves from their debt free ships, but have also kept much better ties with their bankers which are now more than happy to provide additional support and financial resources” said Lazaridis.
He concluded by mentioning that “at the same time, as bankers start to regain confidence in shipping investments and have finished restructuring most of their bad “shipping debt”, we will likely see them take a more active role in the industry and once again open their doors to new customers. Till that point investment opportunities will inevitably be in the reach of the few” he concluded.
In a separate note earlier, Intermodal’s Tasos Papadopoulos had said that “sentiment in the dry s&p market remains positive and we have seen a fair amount of activity. More sales are expected to be concluded over the coming weeks and this is evident if one looks at the number of buyers who attend inspections of vessels which are officially in the market for sale; the number of potential buyers is increasing and it does appear that they (i.e the buyers) feel it is high time to invest, with second-hand prices looking pretty realistic while there is little room prices to go further down” he mentioned.
“In the capesize sector, buyers are lining up to inspect the "Sanko Power" (abt 181k dwt - 2010 blt Sasebo) - we are hearing 8 parties will board the vessel - during discharging operations at Qingdao, China. We also understand that a considerable number of buyers have been granted permission to inspect a 1997-blt handymax M/V "Ljubljana" (abt 43k dwt) at her next discharging ports in Japan. "IVS Kite" (abt 32k dwt - blt Japan in 2002) has recently been inspected by 4 parties in South America and owners have already received offers at just excess USD 12 mill. We are quite sure that if vessel has 3 generators, this would attract more buying interest - especially from Greeks - in view of the high demand for Handies of similar age/tonnage. In the demo market, only in the first 4 months of 2012 about 11m dwt have already been committed for scrap, while in 2011 about 24.3m dwt of dry bulk tonnage were sold for recycling. Freight rates are still on the low side and owners are encouraged to send their vintage and uneconomical units for scrap since prices in India are still on the high 400's despite the falling local steel market which affected many cash buyers who are facing huge pressure trying to resell tonnage already in their hands. In China, local Buyers offering region 420/ldt for high-ldt units and Bangladesh remains the only market offering firm rates but not for long in view of the weakening Indian market. On the newbuilding front, the market has not really recovered yet and despite the high concern over the oversupply of N/B tonnage, the ones with cash are expected soon to start to move ahead again placing orders for what they think are advantageous (in terms of price and innovative eco-designs) ships” Papadopoulos concluded.