Eco Small Dry Bulkers Have 13% Price Premium

Eco engines command a valuation premium of 13 percent for the sector.

An new analysis from VesselsValue.com indicates that small dry bulk vessels featuring fuel-saving eco engines command a valuation premium of 13 percent.

The organization notes that the sector is relatively old and experiences a much lower rate of fleet renewal than other sectors.

"On VesselsValue the average age of a small dry vessel is 18.3 years compared to that of bulkers (8.6 years), tankers (12.3 years) or containers (10.8 years)," it noted in the emailed report.

Calling eco engines "the latest fashion/fad of shipping," VesselsValue.com says it values approximately 8,500 small dry vessels, approximately 30 of which feature an eco engine.

"For such a small minority, one would expect a significant premium; we give on average a premium of 13 percent," it said.

"The small dry sector is well known for its flexibility and post containerisation there was increasing demand for these vessels to carry containers.

"This now represents a significant proportion of small dry trade," added VesselsValue.

The report also notes that an estimated 40 percent of the small dry bulk fleet carry containers, but the average premium those vessels receive is said to be about 5 percent.

The most desirable features were said to be the ability to self discharge, and an open-hatch design, which commanded a 16 percent and 15 percent premium respectively. 

In August, Ship & Bunker reported that while low bunker prices were helping companies cut operating costs, some experts believe they are encouraging shippers to abandon slow steaming practices - a development that could add to the woes of the already troubled dry bulk sector.