Clarksons Research has revealed the huge profits some astute shipowners have been making in strong freight and secondhand markets.
The broker’s cross-sector ClarkSea earnings index has averaged $24,107 per day so far in 2024, 52% above its average since the financial crisis.
“These market conditions would be expected to have impacted secondhand vessel pricing, and the results are marked, with today’s price levels illustrating firm investment appetite for shipping,” analyst Trevor Crowe said.
“Buoyant secondhand price trends will have generated a very healthy outcome for some investors,” the analyst explained.
He gave the example of a five-year-old VLCC purchased two years ago at $70m, operated in the spot market and then sold today at $100m.
This ship would have brought in an estimated $26m in earnings after operating expenses, plus $30m on the asset play.
This is a total investment return of $56m, or 80%.
Crowe said with huge understatement this was “not bad, even in inflationary times”.
Caution understandable
He argued that current pricing in some sectors might now be high enough to make some investors cautious.
But sale-and purchase-markets remain active.
Last year was the second-biggest on record in terms of sales volumes, with ships of 131m dwt changing hands for $51bn.
There has been no let-up in 2024 so far, with a brisk early year run-rate, Crowe said.
A total of 27m dwt was sold in the first two months in deals worth $10bn.
If this pace is maintained, 2024 would set a new record, the analyst added.
“As the industry manages its way through ongoing disruption, both firm transaction volumes and the strength and resilience of secondhand prices provide a good illustration of the current investor interest in shipping,” Crowe concluded.
