Bulker rates have pushed up for the past four weeks and are now covering costs, while asset prices are holding firm and in some cases are increasing.
“With a significant amount of the downward pressure having been alleviate - as earnings are now at much healthier levels and many in the market are starting to hold the belief that we have passed the worst of the storm - the amount of buyer looking to buy at bargain levels has not only risen but has also started to get itchy fingers and become a bit more 'trigger-happy' (as if they are in some sort of wild west movie),” said George Lazaridis, head of research and valuations at Allied.
In a report Lazaridis says modern Kamsarmax and Ultramax are attracting particular attention given the belief they will benefit from increased Indian trades.
“In terms of reported transactions, we have yet to see this ‘eagerness’ reflected in pricing,” he said. “There has been, however, a stronger demand then what had been seen over previous months and buyers are now looking to be considerably more eager to compete for units that they inspect.”
Lazaridis says the increased interest is likely to lead to more completed sales in August and September but he urges owners not to get carried away and push up prices.
“As is always the case, and nevertheless if it happens now or further down the line, buyers seeing the emergence of this trend will feel that they might have ‘missed the market’ and depending on the number of buyers that feel the same, we would likely see another round of price hikes self-fed by new rounds of buying interest and over eagerness to compete,” he explained.
“Let’s hope this time around some will a higher degree of self-refrain before prices have overshot once again.”
