In International Shipping News 26/03/2015
Secondhand containership sales reached their highest ever level in capacity terms in 2014, at 0.55m TEU. The capacity sold in both the Panamax fleet and the 8,000+ TEU sector was the highest ever on record. As a result of higher sales activity in these larger boxship sectors the average size of containership sold rose substantially year-on-year in 2014.
Secondhand Sales Soar
In 2014, 190 boxships of a record 550,778 TEU were reported sold on the secondhand market, 47% above the previous high of 376,002 TEU that changed
hands in 2004 (see the Graph of the Month). This peak was driven by record sale and purchase activity in the Panamax sector, with 40 of these vessels totalling 177,228 TEU reportedly sold last year. Secondhand sales activity was also boosted by the sale of a number of very large containerships, with around 100,000 TEU of 8,000+ TEU vessel-capacity reported to have changed hands last year, representing the first secondhand sales in this sector since 2007. However, the total boxship capacity sold as a proportion of the start year containership fleet (3.2%) was below the level during some years in the 2000s, with a high of 5.7% recorded in 2004. This reflects the rapid pace at which the containership fleet has grown in recent years (at a CAGR of 10% in capacity terms between 2005 and 2015).
Panamaxes ‘Upsize’ Sales
The average size of vessel sold on the secondhand market rose 28% y-o-y to 2,899 TEU in 2014, the highest on record. The rise in Panamax sales was the key driver of this upsizing trend. Sales in this sector were supported by the financial situation some existing owners faced, combined with interest from investors once Panamax earnings began improving. Fresh sales of 8,000+ TEU ships also helped drive this upsizing trend. The size of boxships sold on the secondhand market has generally increased over time as the fleet has upsized and larger vessels have matured in age. Many large containership deliveries are connected to long-term charter business which can keep them from the secondhand market in the initial part of their lifespan.
Who’s Been Selling?
German owners dominated sales activity in 2014, reportedly selling 116 vessels (including 31 Panamaxes) of a combined 313,004 TEU, largely as a result of financial pressures following the collapse of the KG finance system. A further 24 boxships were reportedly sold by Japanese owners last year. The nationality of secondhand buyers in 2014 appears more dispersed, although Greek owners performed an active role in the market.
Bigger Sales To Come?
Following the sale of a record level of capacity last year, sales activity has got off to a good start in 2015 with 33 boxships (including some of 8,000+ TEU) of 98,202 TEU reported sold in the first two months of the year. The upsizing of secondhand vessels could continue as an increasing number of larger boxships mature in age and potentially enter the secondhand market. This, combined with a fast-growing fleet, could lead to higher levels of capacity being sold in the future.
