Market Chat: Capesize values surge by 50% YoY
The Bulker sale and purchase market is back in full swing following the summer break. There have already been 12 sale and purchase transactions reported, compared to two over the whole month of August. During the same period last year, there were just eight Capesizes reportedly sold in September 2023, resulting in an increase of 50% year on year.
There is a very clear trend towards older vessels. All the vessels sold this month to date are over 12 years, and the average age is 17 years as buyers seek more cost-effective older vessels—which are in abundant supply, thanks to the boom of the 2000’s in which we saw Bulker newbuilding levels hit record highs. It is the Chinese buyers who have been the most active in this sector, accounting for the vast majority of purchases at c.83%. Whilst the range of sellers is varied, Greek and Japanese sellers have accounted for c.16% of sales each.
Over the course of 2024, values for older Capes have hovered around 15-year highs, and at the moment, values for 20-year-old vessels of 180,000 DWT have increased by c.49.78% since the same period last year, from USD 13.58 mil to USD 20.34 mil. However, whilst values for more modern vessels have remained relatively stable, it is only the older vessels that have seen a jump in values in September, with 20 YO Capesizes of 180,000 DWT up by c.10.06% month-on-month from USD 18.48 mil to USD 20.34 mil, based on recent benchmark sales.
In terms of earnings, it has been a promising month for Capesizes, ending September just above 24,000 USD/Day. Currently, one-year TC rates for Capesizes are up by c.56% year on year from 15,450 USD/Day to 24,140 USD/Day. There has been much positivity surrounding the Capesize market, which has been strong all year and supported by the increased ton mile demand as many Bulker owners opt to travel around the Cape of Good Hope. In addition, low water levels in the Panama Canal have also caused delays which has further tightened Bulker supply. Recent news from Vale, the Brazilian mining major, indicates that iron ore export forecasts for the full year have been revised higher, which is welcome news for Capesize owners.
Notable recent sales include the Capesize (Newcastlemax) Mineral Cloudbreak (205,100 DWT, Jul 2012, Hanjin Subic) sold to unknown Chinese buyers for USD 38.5 mil, VV value USD 38.95 mil. Also, the China Peace (174,400 DWT, Jun 2005, Shanghai Waigaoqiao Shipbuilding) sold to unknown Chinese buyers for USD 20.3 mil, VV value USD 19.83 mil.