Reluctance from both sellers and buyers to conclude deals is putting a brake on secondhand tanker sales, shipbrokers and analysts believe.
With rates not as eye-catching as earlier this year, and asset values not as attractive to owners, the sale-and-purchase market has stalled.
Cleaves S&P broker Einar Straume said the last week had been “very quiet”.
“Lack of impetus on both sides seems to be the issue,” he added.
Straume noted a lack of sales candidates.
“Freight rates are uninspiring compared to recent history, no longer tempting buyers to jump in for an immediate positive cash flow,” he said.
In tandem with this, sellers remain rich from earlier profitable trading or asset plays.
They feel no need to chase the market down to cash in on what would still be very profitable sales in most cases, Straume added.
Eva Tzima, head of research at Seaborne Shipbrokers, said sellers are holding out in anticipation of higher winter rates.
Despite the softer freight market for crude carriers, secondhand values for available candidates have been hardly affected, she added.
This is because of fast-falling product stocks and depleted crude inventories across the globe, pointing to a strong demand rebound in the coming weeks and ahead of the winter season.
MR owners confident
The focus remains on aframax/LR2 vessels, with some bidders even coming in with more generous offers than expected, Tzima said.
MR sellers, buoyed by stronger rates since mid-July, are leaving buyers less wiggle room on prices, the analyst said.
“In some cases they are withdrawing their vessels from the market altogether, knowing that if the following months prove as profitable as they are expected to be on the freight front, they will not only cash in on the additional employment, but they will also be able to request even higher prices should they decide to sell then,” she added.
One sale reported was that of the 159,000-dwt suezmax Lila Orlando (built 2005) by Lila Global, a company connected to cash buyer Anil Sharma of GMS.
The price was put at $37.8m, with Chinese interests said to have taken the ship.
The vessel has been renamed the Kapok.
Lila Global had only bought the tanker in June, for $37m.
