The sale-and-purchase market has seen a flurry of capesize bulker sales due to fears that the prolonged rebound in prices may soon end.
Sales of at least six large bulkers have emerged since 16 October as Sincere Navigation, Oldendorff Carriers and three Japanese shipowners offloaded tonnage.
The deals come after capesize values have steadily increased since June, after plummeting during most of the first half of this year.
Maritime Strategies International (MSI) managing director Adam Kent told TradeWinds that as bulker earnings cool off at the end of this year, followed by the seasonal iron-ore slowdown early next year, prices are predicted to be reined in.
"Values for modern tonnage will also come under pressure from softening newbuilding prices, as yards pull down prices to attract contracts, in a hurried attempt to backfill the hole left by the dearth in contracting volumes during 2020," he said.
Some sellers are working to sign deals before that happens.
For the buyers, stronger earnings sentiment is driving demand for vessels.
"There is something of a run on cape sales at the moment based on the demand for iron ore from China due to the post-Covid-19 stimulus package introduced earlier this year, and this is the main reason why this particular sector is in demand," broking house Alibra Shipping told TradeWinds.
Among the most recent deals to come to light, Taiwan's Sincere Navigation has sold the 172,000-dwt Mineral Antwerpen (built 2003) to Greek shipowner NG Moundreas in a deal that both companies confirmed.
Brokers reported the ship fetched $10m. Natalia Moundreas, managing director of the buyer's NGM Energy subsidiary, said the price reported by brokers was in line with the actual sales price.
Busy October
One shipbroker watching the capesize S&P action said it has been a busy sales month.
He said large bulkers had been available for sale, but turnover only really picked up at the beginning of October.
Ten-year-old capesizes look relatively good value at prices of about $17m to $21m, he said, compared to newbuildings which are in the mid-to-high $40m range, depending on where they were ordered.
Their attractiveness has only been heightened by what the broker described as a “very much improved chartering market”, although this has weakened slightly in recent days.
Doun Kisen sells big bulker
Among other deals, several brokers also reported that Japan's Doun Kisen has offloaded its 208,000-dwt Baogang Glory (built 2008) for some $16.3m. A Singaporean company is reported to be the buyer for the vessel, which was constructed at Japan's Universal Shipbuilding.
Doun Kisen could not be reached for comment for this story.
The price tag is somewhat lower than the price for another Universal-built sistership that changed hands in recent days.
On Wednesday, brokers said China’s Seacon Shipping Group has been linked to the purchase of the 208,000-dwt Shin-Ei (built 2008) in a $18.9m. The vessel is owned by NS United.
Brokers said the price level shows capesize bulkers have increased in value since August. They cited Berge Bulk's September purchase of the Universal-constructed, 203,200-dwt Cape Daisy (built 2006) from Japan's Fukujin Kisen for between $13m and $13.7m.
In another fresh deal, Eyal Ofer-led Zodiac Maritime bought its second capesize in a month when it picked up the 180,000-dwt Huge Hakata (built 2012) from Japan’s Nissen Kaiun, brokers said.
The Monaco shipowner paid $23m, according to the brokers.
Some brokers also reported that Nissen Kaiun, which could not be reached for comment, has sold the sistership Cologny (built 2011) for $22m.
Meanwhile, Oldendorff Carriers has also disposed of a capesize.
Brokers said the German bulker giant has sold the 181,000-dwt Tilda Oldendorff (built 2011) to Alpha Bulkers Shipmanagement of Greece for $19m.
Opportunity
For MSI, the potential for prices to head back down may signal a buying opportunity.
"Based on MSI’s latest forecasts, those looking to buy tonnage at the price levels seen over this summer will have another opportunity to do so during early in 2021," Kent said.
"This could prove to be a shrewd move for those that do, with MSI forecasting capesize price appreciation over the following five years, enough to offset asset depreciation over the same period for modern tonnage."
This story has been amended since publication to reflect that Fukujin Kisen was the seller of the Cape Daisy.
