Bulkers’ Second Hand Vessel Prices on the Rise

With Capesizes leading the way, prices for second-hand bulkers have been rising steadily over the past few months. In its latest weekly report, shipbroker Xclusiv said that “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”.

According to Xclusiv’s analysis, “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)”.

Similary, Xclusiv points out that “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 shipbroker concluded that “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”.

Nikos Roussanoglou, Hellenic Shipping News Worldwide