MR product tankers remain hotly sought after in the secondhand market, with a string of Japanese vessels put up for sale ahead of their special surveys.
Industry experts and databases point out that six MR tankers have been sold in the past two weeks, including four between nine and 10 years old.
| Name | Dwt | Built | Shipyard | Buyer | Seller | Price |
| Pioneer Express | 47,400 | 2009 | Onomichi Dockyard | Great Eastern Shipping | Nagashiki Shipping | $16m |
| Team Tarantella | 46,800 | 2002 | Brodotrogir | Unknown | Team Tankers | more than $8m |
| New Breeze | 48,100 | 2010 | Iwagi Zosen | Norden | Shoei Kisen | $16.8m |
| Eagle Express | 45,900 | 2010 | Shin Kurushima Ujina Dockyard | Union Maritime | Chiba Shipping | $16.5m |
| FPMC 23 | 49,500 | 2010 | STX Offshore & Shipbuilding | Avin International | Formosa Plastics | low $15ms |
| Torm San Jacinto | 47,000 | 2002 | Onomichi Dockyard | Unknown | Torm | $8m |
Only one of those four, the 50,000-dwt FPMC 23 (built 2010), was constructed by a non-Japanese yard. Its owner Formosa Plastic Marine Corp has been selling non-modern tonnage while taking delivery of newbuildings.
The other three vessels — the Pioneer Express, New Breeze and Eagle Express — were built by Japanese yards and owned by Japanese tonnage providers.
“I believe this is most likely due to the supercycle and the large amount of tonnage ordered back [in 2009-2010],” Banchero Costa research manager Enrico Paglia told TradeWinds.
“Many Japanese shipowners ordered new tonnage and chartered it out for long periods, usually around 10 years and up to 15 years. Now these units are finishing their time-charter commitments and are becoming available for sale.”
Healthy buying interests
Brokers suggest the vessels generated healthy buying interests, with firm sentiment in the secondhand tanker market.
“The steady influx of roughly 10-year-old MRs being sold by Japanese owners has provided liquidity to this sector, and better visibility on pricing,” Clarksons Research said.
Based on VesselsValue’s estimates, the secondhand price of a nine-year-old MR has increased by 4.7% since early July, outperforming younger vessels.
With strong liquidity and healthy earnings prospects, some market participants believe there could be more upside in tanker values.
The large MR segment has seen more secondhand activity than any other type of product tankers in recent years, with a large number of vessel sales in this segment.
According to BRS, 88 sales of large MR ships have been reported so far this year, following a record 2018 when 144 transactions were agreed.
Earnings boost
A slowdown in newbuilding deliveries and incremental distillate shipments triggered by the IMO 2020 rules are also expected to boost MR earnings in the coming quarters, according to analysts.
In Bloomberg’s latest survey of shipping analysts, the median estimate of MR earnings will rise from $13,250 per day in the third quarter to $17,500 in the fourth and $18,500 in 2020.
“There is no doubt that firmness in freight rates will also push [up] vessels values,” Drewry lead tanker analyst Rajesh Verma said.
“Buyers must be eyeing the expected firmness in freight rates in the coming months before the implementation of the [IMO] regulation in addition to the overall firmness in asset values.”
