As bombs fall in Ukraine and geopolitical alarm bells ring, some observers of the market for secondhand bulkers are feeling dizzy.
“Two weeks into the conflict in Eastern Europe and the secondhand market [displays] … an effect similar to that by an MC Escher illustration — a battle between what our logic is telling us should be happening and what we’re actually observing,” Doric Shipbrokers said in its latest weekly report.
Others also note a disconnect between the heady sentiment around them and the more cautious approach they would normally expect.
“The fact that the market is becoming numb to increasing geopolitical risks is … evident from the fresh purchase enquiries in the secondhand market,” Eva Tzima, head researcher at Seaborne Shipbrokers, said on 14 March.
These enquiries translate into bumper prices for owners such as Greece’s Michael Bodouroglou, who has found a good opportunity to part with his oldest bulker.
According to market sources in Athens, Bodouroglou outfit Allseas Marine has agreed to offload the 58,800-dwt supramax Friendly Seas (built 2008) to Chinese interests for about $18.6m.
That is far above the $17.2m and the $17.8m that Signal Ocean and VesselsValue estimate the Tsuneishi Zhoushan-built vessel is worth.
Allseas, an owner of bulkers and container ships, is a regular buyer and seller of vessels with a keen eye out for opportunities to renew its fleet.
Robust sale-and-purchase activity is likely to last as volatility creates expectations of shifting trading patterns.
“All in all, it will take some time before we see the current turmoil in Europe affecting overall market momentum,” Allied Research noted on 14 March.
Vessel sizes bigger than supramaxes are seeing quite a bit of action as well.
Greece’s Nicholas G Moundreas group is spending an unidentified amount on the 82,500-dwt kamsarmax Oceanic (built 2007).
Greek peer Unisea, the Oceanic’s current owner, was reported selling the same ship in March last year for about $16m. Maritime Strategies International puts its value in the current quarter at between $16.9m and $19.5m.
Even owners bailing out of a deal as they get cold feet over Ukraine see others gladly take their place.
The 81,800-dwt BW Rye (built 2019) was committed earlier this month for $37.5m to a Greek owner who backed out of the purchase because of some exposure he had to Ukraine.
According to ship management sources in Athens, another Greek player, Neda Maritime, is stepping in to buy the vessel now at the same price.
Things are a little more complicated with capesizes. Interest for such big vessels is there as well, but buyers are more circumspect, given the relative performance of freight earnings and secondhand values in that size.
In the only capesize deal reported recently, Cara Shipping is said to be in ongoing talks to divest the 180,400-dwt Stella Anita (built 2012) to Greek or Chinese buyers for between $29m and $30.5m.
Cara Shipping sold six capesizes and ore carriers last year, as TradeWinds reported. In February, a seventh, the 180,000-dwt Stella Hope (built 2016), was widely reported sold to Zodiac Maritime.
TradeWinds, however, understands that this deal has not gone ahead and that talks to sell the ship continue.
