Onassis company Olympic Shipping and Management has offloaded its oldest VLCC at a surprisingly robust price — providing further evidence of a disconnect between tanker freight rates and secondhand prices.
The Athens-based company has agreed to sell the 309,300-dwt Olympic Legend (built 2003) to Far Eastern buyers for $31.5m, according to market sources in Athens.
Brokers have been reporting a sale of the ship to Middle Eastern interests since 8 July. However, TradeWinds understands that a memorandum of agreement was not signed before Thursday.
Managers at Olympic were not available for comment.
The price achieved for the Olympic Legend is unusually firm, especially as the ship has no scrubber or ballast water treatment system (BWST) and is due to undergo dry docking this November.
Earlier this month, brokers expressed surprise at the $29m reportedly fetched by a similar vessel — the 319,000-dwt Maran Triton (built 2003), which was built at Hyundai Heavy Industries and also had no scrubber or BWST.
VesselsValue estimates that the Samsung Heavy Industries-built Olympic Legend is worth $29m, while Market Strategies International puts its average fair value for the third quarter between $23.8m and $28.5m.
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The last time VLCCs of this age were seen changing hands for more than $30m was in early 2020, when plummeting oil prices and floating storage plays sent the secondhand VLCC market soaring.
In recent quarters, by contrast, most owners have had to endure spot tanker rates below operating expenses.
However, despite sluggish freight rates, secondhand tanker prices have been steady or even rising this year.
Reasons cited for this include an expected post-pandemic rate recovery as seen in bulkers and containerships, firm steel prices and a strong appetite for aged ships from players in risky trades.
Counter-cyclical players who believe in the prospects of the tanker market are buying ships on the secondhand market or are ordering new ones.
In another deal in the making, Tsakos Shipping & Trading is said to be negotiating the sale of its oldest aframax — the 114,800-dwt Pericles (built 2003) — at a firm price of more than $13m.
Especially in the case of VLCCs, prices rise because prospective buyers simply cannot find vessels to acquire.
“Vessels aren’t offered,” one Athens-based broker said.
The reluctance of owners to part with their tankers also boosts scrap values, which form a floor for secondhand prices.
Bangladeshi demolition buyers are said to be willing to pay $580 per ldt for tankers. Cash buyer GMS predicts that the “mythical” barrier of $600 per ldt might be pierced soon.
Such conditions are beneficial for tanker companies such as Olympic, which has a general policy of offloading vessels older than 15 years to make space for newer ships. At $600 per ldt, the company could expect to earn $25m simply by selling the Olympic Legend for scrap.
Olympic is listed with a fleet of about 20 ships, consisting of 14 VLCCs, four suezmaxes and two aframaxes.
Lucy Hine contributed to this article
