“There has never been a tanker market like this”.
This is how a shipping executive in Piraeus described the state of the secondhand market on Tuesday, after news of yet another landmark S&P deal trickled out.
Major Greek owner Diamantis Diamantides has shaken out the oldest ships in his fleet of 32 tankers.
The quartet of 18-year-old aframaxes fetched $35m apiece, according to ship management sources and brokers in Athens.
“Undoubtedly, that’s a phenomenal price for sellers and maybe a very well-timed disposal,” analysts at Athens-based Xclusiv Shipbrokers commented to TradeWinds.
The buyer of the 111,000-dwt sisterships Delta Pioneer (built 2004) and Delta Captain, Delta Sailor and Delta Victory (all built 2005) remains unknown.
However, it is no secret that the market is on fire for vessels of that age and characteristics, primarily driven by buyers in jurisdictions unencumbered by Western sanctions against Russia over the Ukraine war.
After sanctions got even sharper on 5 December, with a price cap of $60 on Russian oil applying to Western shipping companies and insurers, most mainstream owners seemed to be pulling back from the Russian trade.
This enhances opportunities for companies based in countries outside the direct reach of Western sanctions, such as India, China, the United Arab Emirates and Turkey.
Diamantides company Delta Tankers has been trading the four ships ever since taking delivery of them from Hyundai Samho Heavy Industries.
The fact that they’ve been traded throughout their life by a well-known, respected operator isn’t the only reason they’re particularly hot property in today’s market.
Their pedigree apart, the four ships are epoxy-coated, ice-class aframaxes that come equipped with scrubbers and a ballast water treatment system (BWTS). Furthermore, they won’t have to pass special survey before the end of 2024 or early 2025.
These features should allow the ships’ new owners to trade them profitably in a tanker market that several analysts expect to remain robust through to 2024.
This goes a long way toward explaining why their $35m purchase price exceeds a prior VesselsValue estimate that they’re worth between $33.5m and $33.9m each.
A litany of asset plays
S&P deals for tankers at steadily rising prices have been coming thick and fast for weeks and they show little sign of slowing — especially for aframaxes.
Just yesterday, TradeWinds reported a string of other ongoing lucrative tanker sales by Greek owners.
In one of those, United Maritime Corp confirmed pulling off a $39m deal for the 108,900-dwt LR2 Minoansea (built 2008).
United Maritime didn't reveal the buyer but several brokers said it is Gardsea Shipping, a low-profile Liberian company said to be linked to Indian interests and which brokers recently tied to other acquisitions as well: that of the 116,100-dwt aframax Houston Star (built 2007); of d’Amico Tankers’ 47,000-dwt MR High Valor (renamed Atoll, built 2005) and of the 106,000-dwt aframax Antaios (built 2006).
Separately, Dimitris Souravlas-led Stalwart has reportedly parted with the 105,700-dwt S-Trooper (built 2003) and Avin International with the 109,400-dwt LR2 Saint George (built 2002).
Comatose demolition market gets a break
Diamantides hasn’t been just clearing its house of tankers.
His dry bulk company Marmaras Navigation is taking advantage of a silver lining in an otherwise comatose scrapping market to offload the oldest of its 31 ships.
The 170,200-dwt capesize Paschalis D (built 2002) has reportedly fetched $525 per ldt on an “as is” basis in Singapore. The price includes 500 tons of fuel on board.
Alongside some containership demolition deals reported by TradeWinds, the Paschalis D is the most tangible evidence of a slightly improving sentiment in a demolition market that has been in a dismal state for months.
According to a Clarksons report on 16 December, this has been due to some slight firming in Indian steel plate markets.
Analysts at cash buyer Wirana Shipping Corp concurred.
“There is market opinion in some quarters that prices have bottomed out and could register an increase by mid-January as there has been an increased buying activity by secondary steel mills as well as increased activity in import of scrap,” they said in a note on 19 December.
