Sale-and-purchase brokers say they have sensed buyer enthusiasm, with one major broking house predicting a rise in activity as purchasers line up in a tightening market.
Firming rates for larger tonnage in both the wet and dry segments, with a backlog of deals undone, are only part of the story, according to Martin Rowe, managing director of Clarksons Platou Asia in Hong Kong.
Particularly in dry bulk, the lack of net growth in the market and approaching IMO 2020 deadline add up to good news for his trade.
Window of opportunity
“The much-heralded summer slowdown may not happen this year," Rowe said.
"Capacity has remained steady and there has been a realisation that, as we head into Q3 and Q4, the number of ships going into yards for scrubber installations or regular maintenance is going to lead to a net decrease in the available fleet, which is likely to persist into next year as well."
Rowe, alongside other brokers who declined to go on record, told TradeWinds they hope these factors spell recovery for the S&P market.
"If owners want to buy before prices go up, this is the time to do it,” Rowe said.
The much-heralded summer slowdown may not happen this year. Capacity has remained steady
Martin Rowe
TradeWinds reported last week on the sale of the Shoei Kisen-owned, Ultrabulk-operated 61,200-dwt Ultra Innovation (built 2016) to Greek interests for some $24m.
Rowe cites the strong price as a sign of good things to come.
Positive outlook
"It is definitely an indication of a firmer tone in the market," he said.
Of smaller tonnage, Rowe believes owners of handysizes of 28,000 dwt and under have had a reality check and are likely to adopt lower price expectations in a bid to complete deals going forward.
For example, a recent deal in which an Imabari-28 design ship, the 28,400-dwt Nord Tokyo (built 2009) sold for a price Rowe pegged at $7.8m, depended on a change in attitude on the seller's side, he said.
He believes the sale will serve as a signal to owners of similar tonnage, helping to break the logjam in deals.
Realigning expectations
“Reasonably sized Japanese-built ships of 32,000 dwt and more will always have a market," he said. "But until recently, ships of 28,000 dwt and below were struggling.
"Now sellers of smaller tonnage may be realising they will have to realign their expectations.”
The Nord Tokyo is listed in the fleet of Konlink Shipping, which could not immediately be reached for comment.
