Boxships targeted by bargain hunters
Brokers say plenty of cash purchasers are now eyeing the market .
BUYERS are lining up to inspect a pair of elderly containerships that Claus-Peter Offen has put up for sale as the secondhand market takes the lead in this fledgling and still fragile recovery.
The 1,808 teu Santa Maddalena and Santa Margherita , both built in 1994, are said to be attracting plenty of attention, with as many as 15 potential bidders reported to have expressed an interest.
This level of inquiry follows reports that up to 10 parties were competing for the 6,500 teu former CMA CGM Kessel, which was finally sold to interests associated with Greek shipowner George Economou for around $41m.
That vessel had been put up for sale by Hanjin Heavy Industries after CMA CGM failed to complete its newbuilding order, with the shipyard taking similar action again yesterday with a sistership that the French line was also unable to pay for.
There are now plenty of cash purchasers looking for bargains, according to broking sources, with European interests preferring modern tonnage and Asian buyers interested in older ships. Even a few German owners are in the market to buy, despite the financial difficulties of many KG ship investment funds.
Recent sales include the 5,500 teu Lions Gate and Shanghai Bridge that went for about $22m each, about half the price they would have fetched a year or so ago.
As an example of how far prices have collapsed, Clarkson Research estimates that a 10-year-old 3,500 teu ship that would have been worth almost $50m at the end of 2007 had fallen in value to $29m by the end of 2008 and then just $15.5m by December 2009.
Nevertheless, sentiment is picking up across the box trades, with stronger freight rates driving the rebound. A senior industry source who felt certain a few months ago that at least one major line would collapse no longer thinks that will happen.
That is not necessarily the case for shipowners, who still face charter rates at way below operating costs and added concerns about the potential damage to engines caused by super-slow steaming.
On the other hand, reduced ship speeds are having a dramatic impact on the tonnage supply and demand equation as lines charter more vessels to compensate for much long voyage times.
Latest Alphaliner figures put the idle containership fleet at below 10% of the total for the first time in six months, reflecting a combination of slow steaming and demand for extra loaders to move cargo from Asia before the lunar holiday.
That absorbed an extra 60,000 teu of capacity,according to Alphaliner, reducing the inactive fleet to 508 ships of 1.30m teu at the start of this week, compared with 532 vessels of 1.37m teu a fortnight earlier. The latest figure represents 9.9% of total cellular capacity.
Both the carrier-operated and non-operated owner idle fleets fell, with only the 5,000 teu-7,500 teu class seeing a slight increase over the past couple of weeks as NYK returned ships to their owners.
Of the top container lines, Maersk has an estimated 22 vessels of 96,000 teu out of action, followed by NYK with 13 ships of 59,000 teu idle.
Delivery delays and scrappage continue to slow fleet growth, with Maersk Broker estimating that demolition in January totalled 33,831 teu. That follows 383,321 teu sold for scrap last year and a forecast of at least 240,000 teu likely to be sent to the breakers in 2010.
Maersk Broker now reckons fleet capacity grew by just 5.5% in 2009, similar to Clarksons" recently revised figure and way below earlier forecasts of up to 15%.
The charter market was lively in the run up to the Chinese new year, with lines now willing to take ships for longer periods and at higher rates. That reflects the view that, over a period of time, such rates fixed today will still look cheap.
Maersk Line is one of those now back in the market for five-year charters, having reportedly taken several 2,500 teu units at levels of around $9,500 a day.
Ships fixed include the 2,470 teu Harald S and Kerstin S , and the 2,564 teu City of Hong Kong , with the rates about double those in the spot market. The 2,442 teu Leda Trader , for example, has just been chartered to Hapag-Lloyd for six months at $4,750 a day, while Hamburg Süd has fixed the 2,600 teu Annabelle Schulte for eight months at $4,850 a day.
But as Harper Petersen says in its latest report, out yesterday: ?Despite the optimism, some perspective is required; charter rates for all sizes remain at painfully low levels for owners and most operators continue to lose money.?