Second-hand container vessel sales elicit a new low benchmark every time a sale takes place at the moment, according to ship broker Braemar, which has said that the market is witnessing a widespread economic dampening that will stall the market further.
Most recently the broker cites the sale of the 2009 built Wenchong 1,700 Cape Nati reportedly sold for US$5m to German buyers. According to Braemar the sale was prompted by the financing bank, “but nonetheless sets a new benchmark - though not a surprising one”.
A greater variety of vessels are now coming to the market says Braemar from 15-year old post-Panamaxes to feeder ships.
Prompting the broker to note, “It is very reasonable to expect that in the short term every concluded second-hand sale will set a new low. Once these benchmarks are set, we expect this to pull in more buyers who are currently on the side lines.”
Already this week there has been confirmation from Danaos of two 8,000 plus TEU vessels that it has acquired with a third said to be on the way.
Demolition yards remain closed due to the Covid crisis extending to the end of May in India and Bangladesh, “though rumours that restrictions could soon ease in Gadani,” says Braemar, even so there will be workforce issues and the monsoon season starts soon so there is little chance of a rapid return to ship breaking.
Greek broker Allied reports that while some restrictions appear to have been lifted this does not mean that lockdown has ended.
Even so Allied reports that “In Bangladesh, the government allowed some scrapyards to proceed with the demolition of units that were awaiting at Chattogram anchorage due to the upcoming Amphan cyclone (most of these deals though have been re-negotiated to lower price levels).”
Meanwhile, in India restriction also remain, but local authorities are allowing vessels with Indian crew to be scrapped, said Allied.
“The surge noted in steel plate prices and the anticipated stimulus package from the domestic government will help the country to regain cash-buyers’ interest once the market is fully re-opened. The same conditions are currently seen in Pakistan with the only vessels proceeding for demolition being the ones with local crew members. However, with some stimulus movements being anticipated from the local authorities, we expect interest for business to start showing a gradual revival here too,” added the Greek broker.