Analysis
5/3/2012

"Frankopan" & M/T Oak Galaxy reported sold


Few facts have no need for further analyses. A year earlier, a Japanese
Kamsarmax bulk carrier built at Sanoyas in 2009, (MV ERICA) was then sold
at levels in the region of usd 40 million to clients of Tolani Group.
This week an October 2011 built Sasebo panamax bulk carrier of about 75k
dwt, is rumored to be sold to clients of Zodiac, at levels bit below usd 29
mills. Letting aside case specific factors and our permanent argument with
regard to the pressure currently applied on Japanese sellers, fact remains that a
willing Buyer being the highest bidder, was there to lock the vessel at
above mentioned levels, setting a new benchmark in the market.

On the tanker SnP front, we picked up a couple of rumors this week, most
important amongst them the sale of the Aframax tanker 'Frankopan; built
1995 at levels in the region of usd low 9s mills.
Meantime, the 2005 built 20k dwt class stainless steel chemical tanker M/T
Oak Galaxy, was reported committed at levels close to usd 19 mills.

A continuous depreciating trend of the yen against the USD, as the one
recently observed, will assist second hand sales as well as new building
activities in Japan. It is rumored that Imabari Shipbuilding agreed to
build 4 Kamsarmaxes, at levels close to usd 32 million each with delivery
2014 for Middle Eastern interests. While in China, Cosco Zhousan
has secured a contract from Greek buyers for 2 units of Ultramax Bulk
carriers (levels not known).

Source: ITCM

Analysis

The freight rate war currently taking place between Asia and Europe, and between Asia and the US, and the further addition of new ships, will force carriers to resort to more slow steaming.
In recessions shipping sentiment can sometimes have a slightly schizophrenic feel. The more demolition mantra crops up again and again at conferences, which is fair enough. But it makes a strange bedfellow for the buy low sell high brigade who are desperately searching for cheap ships...

By Mike Corkhill

Last Summer, chemical tanker operators were looking forward to seeing a glimpse of light at the end of what promised to be quite a long tunnel. The majority agreed that the market rebound was still two years off and that the return to a balanced fleet, respectable freight rates and profitable operations was on the cards for 2014. The hatches would have to remain battened down until then.

The shipyard industry seemed to head straight for the output-abyss just 15 months ago. Today the transition from recent years' record high shipyard output to a more sustainable level of output appears to soft-land with global shipyard output clearly slowing down.




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