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Since early October 2023, dry bulk second hand prices have gained momentum

Since early October 2023, dry bulk second hand prices have gained momentum. The high S&P activity in many sectors, as well as the increased newbuilding prices, have driven the second-hand prices north.

The Capesize sector is experiencing a remarkable surge, with both prices and sales activity at high levels compared to recent years. Notably, 5-year-old, 10-year-old, and 15-year-old vessels saw their values jump by 18%, 27%, and 23%, respectively – the highest levels in the last five-year period. This optimism is translating into a vibrant sales market. Between October 2023 and February 2024, a staggering 55 Capesizes changed hands, with Q4 2023 leading the pack with 35 sales, while during Q1, Q2 and Q3 of 2023 we noted 23, 18 and 29 transactions accordingly. Even 2024 is off to a strong start, with 20 sales almost matching whole Q1 2023's volume. This robust activity comes despite Capesize prices having reached the highest levels of the last 5 -year period, with prices even higher than 2022, the period that followed the freight rate surge of mid 2021 (back in October of 2021, the Capesize 5 TC Average paid more than USD 80,000/day).

The Kamsarmax sector mirrors the Capesize trend with rising prices and active sales. Since October 1st, 2023, 5-year-old Kamsarmaxes saw an 8% price increase, while 10-year-old and 15-year-old vessels saw a 12% increase each. However, these values remain below 2022's highs, with a gap of almost 10%, 12%, and 15% for the respective age groups. Similar to Capesizes, Panamax, Kamsarmax, and P-Panamax segments have exhibited robust S&P activity in the past four months. More specifically, during the last quarter of 2023, 49 Panamax/Kamsarmax/P-Panamax changed hands, while during Q1, Q2 and Q3 we witnessed 25, 35 and 33 sales respectively. The new year has also a strong start as within the first 45 days of 2024, 34 vessels have changed hands, almost 50% more that the whole Q1 2023.The Ultramax market has seen significant price increases in recent months, particularly for 10-year-old vessels. Back in October 2023, a 10-year-old Ultramax cost around $19 million. Today, it's valued at around $25 million, representing a significant 32% increase. Both 5-year-old and 15-year-old Ultramaxes have experienced moderate price increases of 7% and 13%, respectively, during the same period. Notably, the price of 5-year-old Ultramaxes has reached its highest level in the past five years. Finally, in the Handysize sector, 5-year , 10-year and 15-year-old prices have increased 8%, 12% and 19% since 1st October 2023.Furthermore, 5-year and 10-year-old prices are 8% down each compared to 2022's highs, while 15-year-old prices are 17% down.

The dry bulk market presents a curious dichotomy. While high prices, significant freight rate volatility, and uncertain future fuel technologies create challenges, interest in acquiring dry bulkers remains strong. Despite significant drops in freight rates since 2021's highs (77% down for Cape 5 routes TCE, 63% down for Panamax 5 routes TCE, and 72% down for Supramax 10 routes and Handysize 7 routes TCE averages), secondhand prices have continued to rise for at least the past five years. This upward trend is likely influenced by the limited new build deliveries comparing to the past, the investor optimism for a long-term rebound in freight rates and the asset diversification, as many owners are looking to spread their portfolio across different vessel segments.

S&P activity:

Dry:

Dry S&P activity was subdued compared to previous weeks, affected by the Chinese New Year holidays. On the Capesize sector, another sale was added in the 2024's massive Capesize's S&P activity, with clients of Minerva selling the "Sapientza"- 178K/2008 Shanghai Jiangnan for USD 22 mills to Chinese buyers. The Post-Panamax "Rising Loong"- 91K/2002 Oshima changed hands for mid/high USD 10 mills, while the Panamax "W-Galaxy" - 77K/2006 Imabari was sold for USD 12.9 mills to Chinese buyers. On the Ultramax sector, the "Santa Johanna" - 61K/2017 Shin Kurushima found new owners for USD 31 mills, while the Supramax "Seamec Nidhi"- 57K/2010 Taizhou Kouan was sold for high USD 10 mills. Last but not least, clients of Devbulk acquired the Handysize "Maestro Sapphire" - 40K/2020 Saiki for USD 29.2 mills.

Wet:

The Scrubber fitted VLCC "Nave Spherical" - 298K/2009 Shanghai Jiangnan changed hands for USD 53.9 mills. Moving down the sizes, Chinese buyers acquired the Scrubber fitted Suezmax "Raptor" - 159K/2007 Universal for USD 46.5 mills. On the MR2 sector, 6x Scrubber fitted vessels, the "Saint Albans Bay" - 50K/2015 SPP, the "Harrison Bay" - 50K/2015 SPP, the "Jennings Bay" - 50K/2015 SPP, the "Lafayette Bay" - 50K/2015 SPP, the "Crystal Bay"- 50K/2014 SPP and the "Excelsior Bay" - 50K/2014 SPP were sold enbloc for USD 238 mills to clients of International Seaways. The MR1 "Leon Hermes"- 40K/2008 SLS found new owners for excess USD 23 mills. Finally, clients of DM shipping acquired the Chemical tanker "Beatrice" - 26K/2013 Asakawa Zosen for USD 29 mills.

Xclusiv Shipbrokers Inc.