The sale-and-purchase market in several segments has slowed down considerably over the past months.
Norwegian broker Arctic Shipping has seen S&P volumes falling this year after a “super active” 2023.
Throughout the summer, the activity was good but it has slowed down in the past months.
Odd Jacob Fritzner, head of Arctic Shipping, told TradeWinds: “Normally this is a period with a lot of transactions.
“But there are very few transactions now because people are sitting on the sidelines, not making the big decisions now because there are so many uncertainties in the markets.”
The markets have been more challenging with rates down in most areas, according to Arctic.
At the moment, secondhand buyers and sellers cannot find a common ground.
Fritzner explained: “There has been a long-term uptick in the whole asset market, but right now the market is slightly out of sync. Historically prices are still quite high.
“Prices have fallen somewhat with weakened earnings but it remains to be seen how far,” he said.
In the offshore space, the activity has also slowed down a bit.
Arctic Offshore International managing partner Jon Lerche said: “But offshore is different. The main trend is rising and the underlying markets are good but people are a bit more cautious.
“The stocks of the OSV [offshore supply vessel] companies are down. So at the moment, it is a bit more difficult to do merger-and-acquisition and sale-and-purchase transactions because you don’t have the same currency in the stock as a few months ago,” he added.
Prices have reached a plateau because they have risen quickly while the chartering markets, especially for platform supply vessels, particularly in the North Sea, have been weaker than expected.
“The current chartering markets do not necessarily support the price level for PSVs that the sellers have come to expect. But after a pause, we firmly believe prices will rise again because the underlying trend is positive,” Lerche said.
Arctic Shipping anticipates a gradual recovery in secondhand market activity during the first quarter of next year.
A lot of geopolitical uncertainty is weighing on the markets.
More clarity on US president-elect Donald Trump’s trade policy and a change of sentiment is needed for more deals to be made.
“We think someone will catch the falling knife in the next quarter. There is still a lot of money to be made in shipping,” Fritzner said.
According to Arctic Shipping, there are sellers with a lot of profit that wish to sell but the buyers must come forward.
Arctic Shipping and Arctic Offshore International are part of the Arctic Group, which also includes Arctic Securities and several other affiliated companies.
“Shipping and offshore are an important part of Arctic’s DNA. It is one of the pillars that Arctic and Norwegian investment banking are built on,” Fritzner said.
“There is a lot of shipping and offshore knowledge in-house. We as brokers must be able to give our clients a full-service offering.”
In 2023, Arctic Shipping had revenue of NOK 63m ($5.7m), while Arctic Offshore had total revenue of NOK 75m.
Arctic Shipping has 14 brokers based in Oslo, Hamburg and Tokyo, while Arctic Offshore International has 11 brokers in Oslo, Rio de Janeiro and Mexico.
Both companies have grown in the past year, with several new team members joining their ranks.
“We are open to both organic and inorganic growth. We are open-minded. We must develop ourselves and our products. There is a value in size,” Fritzner said.
