Dry Bulk Sale & Purchase (S&P) Update

In an effort to be more efficient and focused, from now we will report on this blog only pertinent transactions per market segment and asset class for s&p (sale & purchase market) that have occurred in the last couple of weeks. Transactions and transaction details in shipping are never as transparent and clear-cut as many an analyst or an appraiser may wish to think; having the benefit of time-lapse and fact-checking, we believe that reporting more accurately sales vs reporting them prompter is of greater service to our readership. Also, our reporting will be more structured by market segment and asset class going forward. Transactions will be purely reported herewith; commentary on market conditions and trends, discussion on transactions and developments and their significance will be posted at our sistership blog, Shipping Finance by Karatzas Marine. Please feel free to subscribe!

As always, shipbrokerage and shipping finance advisory is provide by our sponsor company, Karatzas Marine Advisors & Co.

Despite the summer seasonality in the sale & purchase market, the market overall has been active; in the dry bulk market, there is no humongous volume of vessel sales, but the freight market has been improving ever so slowly since late spring, and many buyers (or at least interested parties) are trying to call the bottom of the market. There is increased buying interest and activity in terms of inquiries and vessel inspections – which does not always translate to transactions; interest nevertheless remains respectable. There have been concerns that some ‘hot’ buyers are outbidding the competition by a few hundred thousand dollars, but overall the market remains very disciplined. There is strong focus on modern and high quality tonnage, and always within certain price discipline; older- or lower- quality tonnage keeps receiving high opportunistic and sporadic attention only.

MV WASABORG 10

May the seas always be calm… (Image credit: Karatzas Photographie Maritime)

In the capesize market, MV ‘Churchill Bulker’ (179,000 dwt, Hyundai Heavy, 2011) was reported sold by Denmark’s Lauritzen Bulkers to Greece’s Marmaras Navigation at region $34 million. A week or so earlier, sistership MV ‘Corona Bulker’ (179,000 dwt, Hyundai Heavy, 2011) was reported sold at same terms from same sellers to same buyers. Lauritzen Bulkers had mentioned in the last year that they would be looking to divesting of their dry bulk assets, and thus they are carrying through with these transactions; on the other hand, Marmaras Navigation had mostly been pre-occupied with their tanker fleet, but since earlier this year they have been buying into the dry bulk downcycle. They have a very good name for timing correctly the market in the past, thus it will be interesting to see whether the recent build-up of their dry bulk fleet would add onto their reputation. Similarly-aged capesize vessel MV ‘Houheng 2’ (179,000 dwt, HHIC-Phil at Subic SY/Philippines, 2011) has been sold at less than $31 mil from her Chinese owners (Henghou Industries (H.K.) Ltd.) to undisclosed European owners; the marked down on pricing is clear compared to the Lauritzen sales, as buyers are extremely preferential for quality tonnage; it’s further understood that despite her age, MV ‘Houheng 2’ had to undergo extensive engine repairs last year, confirming buyers pre-occupation with tonnage with unblemished pedigree. Also similarly aged capesize vessel MV ‘Blue Cho Oyu’ (180,000 dwt, Daehan, 2011) was sold by S. Korean interests to Mano Maritime Ltd. (Israel) at $33.5 million, a strong pricing given the vessel’s pedigree. Resale newbuilding MV ‘Glory Max’ (Hull No Shanghai Waigaoqiao 1335, 180,000 dwt at Shanghai Waigaoqiao with 2016 delivery) was sold by Gleamray Maritime to clients of Coberfelt in Belgium at $44 million. Older sistership capesize tonnage MV ‘Raiju’ and MV ‘Kohju’ (173,000 dwt, NKK SB, 2000/2001, respectively) were sold from the Mitui keiretsu to clients of SwissMarine and Winning Shipping, respectively, at appr. $9.7 million, each; prices achieved represent a precipitous drop from sale prices achieved just nine months ago, and it will be interesting to see how these two last transactions will play out for the buyers, given that pricing are just a premium to scrap but vessels have at least seven more years remaining economic life each.

In the panamax asset class, the post-panamax bulker MV ‘Umberto d’Amato’ (93,000 dwt, Jiangsu Newyangzi/China, 2011) was sold to German interests at just below $15 million. Sistership vessels MV ‘WelHero’ and MV ‘WelSuccess’ (93,500 dwt, Jiangsu, 2010) were sold en bloc by South Far Ocean Group Ltd. to European interests at $28 mil collectively.

Modern panamax bulker tonnage has seen increased buying interest with a series of transactions to report: MV ‘Asita Sun’ (82,000 dwt, Daewoo (DSME), 2012) at $20 mil to Greek buyers (Golden Union or Chandris) via bank sale; MV ‘Orion Pride’ (81,500 dwt, Hyundai Samho, 2011) at $19.7 million by Golden Bridge in S. Korea to undisclosed buyers (reported Golden Union in Greece); Golden Union has also been reported to be the buyer of a similar unit, MV ‘Bergen Trader’ (81,500 dwt, Sundong, 2011) by Nisshin Shpg.Co.Ltd. at appr. $19 mil; MV ‘Rainbow Ace’ (81,500 dwt, Guangzhou, 2012) at $16 million to Norwegian interests (Golden Ocean).

There have been sufficient sales of ‘traditionally’ size panamax dry bulk vessels as well: MV ‘Luyang Rising’ (76,500 dwt, Yangfan, 2012) was sold to German buyers at a relatively soft price of $15.5 mil (but with intermediate survey promptly due). MV ‘Rondeau’ (77,000 dwt, Namura, 2006) was sold to Omicron Ship Management in Greece at $13.8 million. MV ‘Kanishka’ (76,000 dwt, Tsuneishi, 2005) was sold at auction in S. Korea at a low price of $11.5 mil to Greek buyers (Sun Enterprises); the vessel has been at lay-up for some time now, and buyers will have to spend some money to bring the vessel back to a trading condition, which reflects the softness in pricing. By comparison, similar vessel MV ‘Grace Future’ (75,500 dwt, Universal, 2006) was sold to Greek buyers (A.M. Nomikos) at a very respectable $13.3 mil. Moving on to older tonnage, MV ‘Mahitis’ (75,000 dwt, Hyundai, 2001) was sold to Korean buyers (KLC) at a reported price of $8 mil., while 1998-built in Japan MV ‘Star Natalie’ (76,000 dwt, Sumitomo, 1998) achieved scrap-related pricing at ca. $4.2 mil.

MV HARLEQUIN 10

A flower-y market? (Image credit: Karatzas Photographie Maritime)

On to the ultramax / supramax asset class, an interesting sale for M/V ‘Yangzhou Dayang DY216’ (63,500 dwt, Dayang/China, 2015) by Crown Ship Ltd. at ca. $22.5 mil to an institutional investor in the U.S. (Raven Capital); after many funds were burned, there have been no sales to institutional buyers in a long while, thus the transaction stands out; it also stands out for the institutional investors’ preference buying ‘cheap ships cheap’, which it has not been of great investment success strategy, at least so far. MV ‘KT Condor’ (58,5000 dwt, Tsuneishi Zhoushan, 2011) was sold by Kambara Kisen at ca. $14.5 mil to Greek buyers (Kondinave). Similarly aged MV ‘Daxia (57,000 dwt, 2011) was sold at auction in Malta at $11.5 mil (understand that the vessel has been at lay-up for several months now, thus, besides the auction discount, there is also the costs associated with bringing the vessel back to trading condition.) Marmaras Navigation has also been active in the supramax market with the acquisition of two sisterships MV ‘Hanjin Albany’ and MV ‘Hanjin Rostock’ (55,700 dwt, Hyundai-Vinashin/Vietnam, 2011) at a lowly $13 mil each. MV ‘Nord Reliable’ (58,500 dwt, Tsuneishi Cebu, 2008) by P&F Marine achieved $13.8 mil to clients of Sea Globe.

For older tonnage in the sector, MV ‘Medi Osaka’ (53,000 dwt, Oshima, 2003) was sold by Nisshin Shpg.Co.Ltd. at $7.8 mil., while the also Japanese-built supramax MV ‘Olympias’ (53,000 dwt, Onomichi, 2001) was sold at a bank-driven-transaction at $7.2 mil. by Petrofin to other Greek buyers. Similarly, MV ‘Speedwell’ (50,500 dwt, Kawasaki, 2003) was sold by Misuga Kaiun Co. Ltd to Greek buyers (DND) at ca. $7.8 mil.

The transactions reported above have taken place within the month of July, and it seems to be a rather decent volume of business. However, one has to take into consideration that July has been the best month the dry bulk freight market has seen in a while, thus there had been some pent-up interest; also, although there has been certain price improvement since out last report, there is little real news to send home. Besides, several of the transactions mentioned above were for vessels at lay-up, and/or at auction, and/or driven by banks, and several of the Japanese sales were for reasons beyond market considerations, thus not a great deal of ‘voluntary’ trading volume.

As a matter of hopeful thinking, the graph herebelow depicts the Baltic indices since the market bottomed in early spring. Just think positive, enjoy the hopeful chart, and do not let sinister thoughts disturb skin-dipping in your favorite waters in the summer!

Baltic Indices since FEB2015

Baltic Indices since February 2015.


© 2013 – present Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website.Whilst every effort has been made to ensure that information herewithin has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.

S&P, Newbuilding and Demolition Update (January 18th, 2014) – Dry Bulk Focus

By the end of the week, the notable decline of the BDI and dry bulk freight rates since late last year came to a stop with a marginal improvement on Thursday and Friday, mostly on relatively stronger recovery in the cape market; still, it was a down week for the index, with about 0.75% decline. Crude tankers have been the star of the week, with freight rates improving impressively on certain routes; some improvement is due to seasonality – still, winter season in the northern hemisphere, due to bad weather affecting vessel routing – heavy delays due to fogging in the Bosporus affecting Suezmax tonnage trading Black Sea, and due to lower tonnage availability in the AG – owners have been ballasting en masse VLCCs from AG to WAF for better prospects (probably an interesting point for further analysis, ballasting vessels around the Cape and incurring millions of dollars in bunker expenses in the hope of better prospects in another geography; ‘herd mentality’ possibly, but for now, AG tonnage faithful tonnage got the best of it, and their prospects look good for February, too.) The best markets have been Caribs – USG and cross-Med trading for aframaxes, where in the latter market have benefited by association due to Bosporus delays but mostly have benefited from Libya’s crude exports coming to the market again (as a reminder, just last week, rebel forces had threatened to open fire at tankers approaching terminals for loading, but the economics got the better of the threats, since oil exports translate to hard currency in a desperate country.) One of the highest fixtures has been ExxonMobil’s fixture of Thenamaris’ MT SEAOATHat 260 WS, well in excess of $100,000 TCE for cross-Med voyage.

Activity in the sale & purchase market continues robustly, as hopes for a market recovery seem to be getting stronger hold. Late last week, it was reported athat Marmaras Navigation of Greece has acquired Hull No J0021 for 176,000 dwt capesize vessel with 2014 delivery at Jinhai Heavy Industries at approximately $47 million, and also Greek independent owner Transmed has acquired Qingdao Beihai BC180-26 and BC180-30 hulls (MV CENTRANS RYTHMand MV CENTRANS ETERNAL”) for 180,000 dwt capesize vessels with 2014 delivery at about $48 million, each. These transactions stand out for a couple of reasons: despite the overall pessimism in the capesize market, still, these are acquisitions by ‘real’ independent, operating shipowners who put a lot of their own equity at risk (as opposed to ‘OPM’ investments) which indicates real conviction in the market; further to it, the pricing seems extremely competitive as compared to recent ‘OPM’, highly advertised acquisitions of comparable tonnage, and also compared to standard shipbroker tables with ‘Cape Resales’ markedly in the $50+ million territory.

Pretty woman MV GRAND DIVA!

Pretty lady named MV GRAND DIVA! (image source: http://www.shipspotting.com)

The Kamsarmax vessel MV „MINERAL PEARL (81,500 DWT, 2013, Guangzhou Longxue) has achieved $27 million, while almost comparable vessel MV „PRETTY MASTER(82,000 DWT, 2013, Zhejiang Judger S.B.) was sold at the relatively weak $24 million. Possibly the confused identity name of the vessel may explain the price differential? Panamax bulker MV „TRAVE (75,300 DWT, 2001, Hyundai Samho) was sold to Kassian Maritime in Greece at the rather strong $16.1 million, while MV „GRAND DIVA(75,600 DWT, 2007, Imabari SB) was sold at $21.5 million to Italian buyers (Augustea.) Older panamax MV „GLOBAL TRIUMPH (73,000 DWT, 1996, CSBC Kaohsiung) sold to a scrap related $8 million to Chinese buyers (Shandong Shagang.)

MV DIETRICH OLDENDORFF (image source: Oldendorff Carriers)

MV DIETRICH OLDENDORFF (image source: Oldendorff Carriers)

Ultramax vessels have been in high demand recently, and Greek buyers have acquired four SDARI 64 vessels under construction at Jinling Shipyard (Hull Nos: JLZ9120408-11) ordered by Asia Pacific Enterprises; all vessels are due to deliver in 2014 and price consideration has been at about $30.5 million per vessel. We understand also the Oldendorff Carriers has sold a Crown 63 deign ultramax vessel MV „DIETRICH OLDENDORFF” (63,500 DWT, 2013, C4x35T, Dayang S.B.) to Greek buyers at $31 million, with a market-indexed charter back to the sellers.

Supramax tonnage has also been active, with the MV „FAR EASTERN VENUS (53,500 DWT, 2006, C4x30T, Imabari S.B.) fetching $21 million, while also Japanese built MV „IKAN SERONG (56,000 DWT, 2006, C4x35T, Mitsui Ichihara) achieved excess $ 22 million.  Chinese built and with survey due shortly MV „ORIENT RISE (56,500 DWT, 2010, C4x30T, Qinghan Shipyard) achieved a rather weak $21.5 million from German buyers. Handymax vessels have also been active with sistership vessels MV „PACIFIC CHAMP and MV „PACIFIC ROYAL (43,000 DWT, 1996, C4x25T, H.H.I.) achieving $9 million each, while slightly older but comparable Japanese-built vessel MV „AZURE SKY(45,750 DWT, 1995, C4x30T, Imabari S.B.) achieved a shade below $9 million. Slightly newer and larger, still Japanese built MV „EILHARD SCHULTE (49,500 DWT, 1999, C4x25T, IHI) achieved $12.75 million from Greek buyers, while slightly older and smaller Japanese-built MV „TINA A (42,500 DWT, 1999, C4x30T, I.H.I) achieved $10.5 million by Danish buyers.

In the pure handysize market, MV „DANIELA BOLTEN (23,750, 2007, C4x30T, Shin Kochi H.I.) was sold at just below $15 million, while MV „CS SOLARIS (28,500 DWT, 2001, C4x30T, Imabari S.B.) was sold at a shade less $13 million. Large handy MV „CARL OLDENDORFF(31,500 DWT, 2002, C4x30, Saiki) was sold to undisclosed interests at $14.1 million.

Definitely lots of activity to report, and this is only in the dry bulk market. We understand that most of these sales, primarily of ‘older’ tonnage, are individual sales (as compared to en bloc ‘corporate’ sales reported in our previous report) by independent owners, signifying still strong activity in the market and expectations for a recovery. And, as not to be any doubts about the strong market recovery expected – sometime, somehow – about eighty-five (85) were ordered so far in 2014, about four (4) vessels per diem, which, surprisingly, is well below 2013 activity when on average, seven (7) vessels were getting ordered each and every single day of the year, Saturdays, Sundays and holidays included.

Long live the market recovery!

© 2013-2014 Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website. Whilst every effort has been made to ensure that information herewithin has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.

S&P, Newbuilding and Demolition Update (September 30th, 2013)

Cape Asset Pricing Improvement, for now
The capesize market had a terrific last two months with freight rates briefly passing $40,000 pd recently for an eye-catching improvement of almost 300%.  As phenomenal such rates as they may be, one may even call them a ‘fantastic object’ as legendary investor George Soros would say, unreal but immensely attractive; besides the obvious question on whether the freight rally is sustainable, there have been anxious inquiries on the impact of the rally on asset pricing, especially for modern capesize vessels.We understand that the 2013-built at IHI (now called Japan Marine United after the recent merger with Universal Shipbuilding Corporation) 180,000 DWT capesize vessel MV „CAPE CHALLENGER 1” was sold last week at about $51 million. Although the owner of the vessel was a Japanese local company, we understand that the sale was controlled by Mitsubishi Corp as the Sogo Shosha. There are conflicting reports on the buyers, ranging from private Greek owners (Carras Hellas) to the publicly traded Navios Group (if the buyer is a publicly traded company we are sure to have the obligatory PR in due course.)  Also this week, the 2013-built at Hyundai Heavy (HHI) 173,000 DWT capesize vessel MV „JK PIONEER” has been reported sold, possibly to clients of Diana Shipping (DSX) at a reported price of $52-53 million. Sellers are Korean-based JK Maritime, and the solid price is partially attributable to ‘eco design’ of the vessel and very good ‘spec’ despite the below market charter-attached of about $11,500 pd for six more months (which, if true, would impacted negatively the price.)

Big Cape Docking (Image Source: Vale)

Big Cape Docking (Image Source: Vale)

These two sales indicate substantial improvement for modern cape pricing over the last few months based on a market comparison analysis. About a month ago, Belgium-based Bocimar (Compagnie Maritime Belge) sold their 2012-built by Hanjin Subic in the Philippines MV „BULK CANADA” at $41.5 million to Norway’s Berge Bulk; given the perceived ‘weak’ name of the shipbuilder in the marketplace, some discount is attributable to such fact. Shortly before that, in late July, Jinhai Heavy Industries-built / controlled 179,000-dwt Hull No J0021 with 2013 expected delivery was sold at a reported price of $38 million to reportedly Greek interests (possibly, Marmaras Navigation.) This vessel had been ordered in 2010, based on information from market reports at the time, on behalf of Fredriksen’s Golden Ocean concern with an expected April 2012 delivery, but accurate details of full-fledged newbuilding contract details, such as refund guarantees, down payment, etc are thin at least. In any event, both these older sales deserve a downward adjustment of a couple of millions due to their shipbuilding pedigree and the potential lack of any extra TLC provided during their construction; and, both of the current sales came from high quality yards and seem to be of good specification, at least of specification not seeing in the market that often from sale candidates.

Based on these sales, there has been an asset appreciation in play to the tune of probably more than 25% over the last two months (when adjusting for age, spec, quality of parties involved, reputation of shipbuilders, etc)  No bad for two months’ time, especially after the misery of the markets in 1H2013; and, again, freight improved by ten times as much in almost the same interval.  Based on our discussions with market players, we understand that several modern capesize owners were approached about the possibility of selling vessels, providing another sign that the sentiment, at least temporarily, has improved and underlying the ever stated argument that there are no good vessels for sale.

It will be interesting seeing how the market will develop, and whether the present developments in the cape S&P market are indeed signs of a cyclical recovery or just another ‘false positive’ temporary peak.  At least for the immediate future, the market is widely expected to take a breather with Golden Week underway in China – the mother of the cape market; also, the paper market (FFAs) have not softened in the last two weeks despite the improvement of the spot market (CAL 14, CAL 15 and CAL 16 trade at about $17,000 pd,) well below the spot market, although the paper markets in shipping often trade in backwardation.  And the drop over the last two weeks for HRC steel has dropped by $20/ton squeezing the margins for the steel mills.

© 2013 Basil M Karatzas & Karatzas Marine Advisors & Co.

No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders.