A combination of weaker rates and falling asset values has prompted a major increase in capesize bulker sales by Japanese shipowners.
A total of 12 such ships have been sold in the first seven months of 2023, representing a year-on-year increase of 20%, according to VesselsValue.
“The average age of vessels sold was 15 years and almost all of these vessels were Japanese-built and many were sold with long-term charters attached,” said Rebecca Galanopoulos Jones, content analyst at VesselsValue.
“Chinese buyers led the way accounting for four purchases, followed by Singapore with three. Buyers based in Japan, Monaco and Turkey each bought one vessel and two went to undisclosed buyers.”
Capesize rates have fallen about 9.9% year on year to around $15,553 per day as of the end of July 2023, according to VesselsValue.
Meanwhile, secondhand values for older capesizes have fallen so far this year and since the start of the third quarter values for 15-year-old ships have fallen nearly 6% to $18.52m.
Jones said this is the first time values for this sector have fallen below $19m since July 2021.
Recent sales have included NYK Line’s 180,200-dwt Atlantic Tiger (built 2006), which went to Singapore-based Winning Shipping for $16.65m.
VesselsValue estimates the worth of the vessel should have been closer to $18.12m, with the sale marking a benchmark that pushed values lower.
More recently, at the end of July, Kitaura Kaiun sold the 176,800-dwt Shiosai (built 2009) to unnamed Chinese buyers for $20.85m, against a VesselsValue estimate of $20.92m.
“With rates relatively flat, this has put downward pressure on capesize values, following a lacklustre outlook from China,” said Jones.
“This has been in part due to weak sentiment in the real estate sector, which has in turn had an impact on construction and, therefore, steel demand.”
Jones said coal demand has supported freight rates “to a degree” and there is much resting on a rebound in the second half of the year, which historically tends to be stronger.
“And whilst limited fleet supply will provide further support to the market in the medium term, the commodity market seems to be returning to normal following the post-pandemic highs,” she added.
