UK shipping fund Tufton Oceanic Assets is moving its focus to tankers and bulkers as container ship newbuilding orders pile up.
The London-listed operation sold four boxships in the first quarter, while acquiring two handysize dry cargo vessels.
Tufton said the container ship market remained strong over the first three months, with record time-charter rates and asset values.
However, there were fewer transactions in the sale and purchase market in February and March.
In its first quarter update, Tufton pointed out that the boxship orderbook has risen to about 25% of the existing fleet, which will result in increasing capacity growth from 2023.
“The company has therefore re-allocated capital away from the container ship segment,” the shipowner said.
Tankers, however, are expected to improve over the year, Tufton added.
Clarksons Research is forecasting higher demand due to shifts in oil trades that are increasing average distances.
The product carrier spot market strengthened significantly over the quarter and several transactions in April showed rising asset values.
“Bulkers continue to offer strong yield and have supportive supply fundamentals, with the orderbook at only circa 7% of [the] fleet,” Tufton said.
‘Multi-year up-cycle’
“Tufton believes the shipping market is in a multi-year up-cycle as the lack of new orders in most segments results in supportive supply-side fundamentals and offers investors inflation protection,” the company added.
Tufton’s net asset value return was 2% in the first three months.
None of the company’s 21 vessels has been impacted by the war in Ukraine and all remain fully insured against war-like events.
The shipowner is exercising its right to prohibit its ships from trading in areas assessed as “perilous”.
