Bulker Values on the Rebound From "Rock Bottom" Levels: VesselsValue

Wednesday March 1, 2017

A new report from VesselsValue says bulker values over the past 12 months have "hit rock bottom," and now have nowhere left to go but up.

VesselsValue says values among 5-year-old handysize bulkers, as well as 15-year-old Panamax and Supramax assets, have risen by more than 40 percent, while pre-2002 built Capesize vessels are up by about 35 percent since February 2016.

The Supramax sector is said to have seen some of the largest gains, with the average asset price increase in asset prices across the sector was 31 percent.

"The sector has seen fleet growth slowing considerably," explains VesselsValue of the Supramax segment, noting that "growth in 2016 was only 2.9 percent down from 8.2 percent in 2012.

"This can be attributed to the emergence of the market for Ultramaxes. In 2015 there was 75.8 percent growth in for Ultramaxes that shrunk to a more manageable 35.2 percent in 2016."

However, despite recent gains in bulker values, VesselsValue notes that charter rates have not experienced a similar exuberant rebound.

Continuing its reluctant march toward recovery, the Baltic Dry Index (BDI) shed 19 points Tuesday to close out the day at 859.

In terms of average TC spot rates, earnings in the Capesize segment were down Tuesday, falling to $8,027 per day (-$1,106), while earnings in the Panamax and Supramax segment rose to $7,996 per day (+$236) and $8,622 per day (+$75), respectively.

Last week, Ship & Bunker reported that BDI has once again broke above the 800 mark, supporting recent analyst suggestions that, with seasonal slowdown around Chinese New Year now over, the market is now positioned for recovery.