It is proving a record-breaking year for container shipping.
Freight rates hit an all-time high last week, with the Shanghai Containerised Freight Index breaching 3,100 points.
Similarly, the charter market has risen by 55% since the start of the year and is on the verge of breaking the record levels of spring 2005.
Average containership earnings of $24,833 per day are close to breaching the $25,018 per day in 2005, according to shipbroker Clarksons.
Those dynamics have helped fire up the sale-and-purchase sector, where secondhand boxships are being sold in record numbers and owners are making hay.
Sales of container tonnage in the first quarter of the year hit 420,000 teu, which is the highest level ever recorded, according to Clarksons.
That has pushed up asset values across the board to their highest since July 2012.
In the classic panamax sector, a 10-year-old, 4,400-teu boxship increased 40% in March — and 84% since the start of 2021 — to reach $35m.
But prices and values are rising with each new deal.
Borealis reap $37.5m panamax reward
UK-based Borealis Maritime this week sold the 4,255-teu Arguello (ex-Ambassador Bridge, built 2009) to South Korea’s SM Line for $37.5m. Borealis bought the vessel for $9.2m in May 2019.
Similarly, the 4,245-teu Navios Delight (built 2008) is said to have been sold for $34.5m to Oman Shipping.
The vessel was one of 14 containerships acquired in 2017 by the Navios group for $114m, or about $8m each. Navios Maritime Partners also recently sold the 4,250-teu boxship Navios Dedication (built 2008) for $33.9m.
The fourfold increase in vessel values explains the willingness of owners to sell.
Liner operators, on the other hand, have been picking up vessels as an alternative to soaring charter rates.
That is especially true for charterers of larger boxships, where rates of $50,000 per day over five years are increasingly common.
Charters hit $50,000 per day
Older narrow-beam designs are also in demand, with the 8,814-teu Northern Juvenile (built 2009) reportedly fixed for five years with France’s CMA CGM at $48,500 per day.
That is nearly 10% higher and taken for a longer period than the fixture — a few weeks earlier — of the 8,814-teu Northern Jamboree (built 2010), which was chartered for 48 months at $44,000 per day.
“With fewer charter-free opportunities, there is also appetite from buyers for vessels with forward delivery on expiry of the current employment,” Clarksons said in a weekly containership report.
“All the tell-tale signs of a boom market are there: ever-increasing period and longer lead time for fixtures run alongside the obvious rate improvements,” it added.
“But liner S&P activity has also skyrocketed, especially in the larger sector where prices being shown by buyers eager to secure modern tonnage are easing owner’s decision-making processes considerably and removing some key tonnage from the charter market.”
'Eternal dilemma'
One industry source said liner operators are buying ships on the calculation that buying a vessel and trading it down to scrap value makes more economic sense than chartering them.
The most active player has been Mediterranean Shipping Co (MSC), which has acquired more than 40 vessels in the past six months.
The Geneva-based operator shows no sign of slacking and last week picked up two post-panamax boxships, the 9,034-teu Skyros and Symi I (both built 2014) from Embiricos-controlled International Maritime Enterprises in a deal worth an estimated $200m.
The deal followed transactions for the 9,288-teu CMA CGM Magdalena (ex-Anaxagoras, built 2016) and Adonis (ex-CMA CGM Uruguay, built 2015), which were purchased earlier in April from US-listed Capital Product Partners for about $100m each.
Charterers of smaller boxships are also moving into the market to purchase ships.
French operator Marfret described the decision over whether to charter or buy vessels as an “eternal dilemma”.
It recently completed the acquisition of its eighth vessel — the 2,500-teu Nordmaple (built 2018) — from the fleet of Germany’s Reederei Nord for an undisclosed price.
The vessel has been bought in a sector where values have also appreciated significantly in recent months.
Brokers report the Japanese-controlled, 2,553-teu St Blue (built 2011) as sold to South Korea’s Sinokor Merchant Marine for $22.5m.
Brokers said this was about double the price that a sistership — the 2,553-teu NSC Kingston (built 2008) — fetched at the end January.
For the moment, there are few signs of any slowdown in a market that is proving self-perpetuating.
