Investing in newly-built ships now would yield no return for the first three years, Norwegian bank DNB says.
According to DNB analyst Petter Haugen, shipping markets have hit a 10-year low in terms of return on investment.
He compared the cost of purchasing a promptly delivered newbuilding and operating it with the income generated by a three-year charter contract.
Assuming that 70% of the ship’s price was financed by the bank at an interest rate of libor plus 3%, DNB’s analysts then asked how much return a prospective shipowner could expect on a 30% equity stake.
"The short answer today is about zero over the next three years," the bank said.