Asset values halve and are tipped to fall further as charter market begins to crumble.
The container ship secondhand market has staged a sharp recovery, with prices dropping between 50% and 75% compared with a year ago. Weaker fundamentals in the charter and freight markets mean further declines are likely over the coming months, according to Alphaliner. The boxship market saw 185 deals of more than 600,000 teu in the first half of the year, the analyst said — nearly double the volume of the previous six months.
MSC Mediterranean Shipping Company was far and away the most active buyer, snapping up 27 units equivalent to 142,000 teu, amounting to nearly one-quarter of capacity sold in the first half. The Geneva-based carrier has emerged as the buyer of the 1,740-teu X-Press Cotopaxi (renamed MSC Paxi II, built 2004) which is reported sold for an undisclosed price. French operator CMA CGM bought seven units with a total capacity of more than 55,000 teu in the first six months. But lower asset values have marked the return of smaller liner operators and tonnage providers that were excluded when prices were higher.
Demand has been particularly strong for older tonnage. Vessels over 20 years old amounted to one-third of sales by number and capacity, says Alphaliner. That has continued, with Conbulk Shipmanagement selling the 2,902-teu Maersk Penang (built 1998). The vessel is reported sold to fellow Greek owner Pegasus Maritime Enterprises for around $8m. Buyers have also been snapping up smaller container ships in the 1,000-teu to 3,000-teu segment. Germany’s Briese Schiffahrt recently sold the 1,732-teu Neuburg (built 2010) to an unnamed buyer for more than $14m, brokers said.
Charter rates have held up so far this year, but finally seem to be falling. Failing fixtures A number of fixtures for traditional panamaxes of 4,250 teu failed in the past week. The vessels were under negotiation at rates close to $24,000 per day for two-year periods, according to market sources. In the smaller sizes, container ships are fixing at lower rates and for shorter periods. Briese had to accept a sharp discount for the 1,781-teu newbuilding Samal (built 2023), which was recently delivered from China’s Huanghai Shipyard. The Bangkokmax has been fixed to CMA CGM for 12 to 16 months at around $15,000 per day — about $3,000 per day less than such a vessel might have obtained in late June. Harper Petersen described the fixture as reflecting “the new market reality”.
There is no demand for these vessels at previous fixed levels, the shipbroker said, and more than enough supply to place downward pressure on rates. The decline in rates is also reflected in the fixture of the 1,707-teu Green Hope (built 2014) for six months to Singapore operator SeaLead Shipping at just $12,300 per day. That is $2,000 lower than what has been done so far this year and compares with last done 12-month fixtures at 18,000usd per day.