The Hindu Business Line : Ship owners sell bulk carriers on freight boom

"The value of a handymax vessel worth $33 million-34 million about two months ago went up by about 15-20 per cent and is now ruling at about $40 million-41million", an industry official said.

Bangalore , Aug. 31

The domestic ship owners have sold eight bulk carriers (handymaxes) in the past few weeks to encash the opportunity arising from a sudden boom in freight market for bulk carriers and the resultant rise in asset valuations.

The sale cumulatively shaved off about 3,60,000 dead weight tonnes (dwt) from the national tonnage.

Companies

Varun Shipping, Tolani Shipping, Mercator Lines, West Asia Maritime, Century and Chettinad grabbed the opportunity they were looking for so long to come out of the bulk carrier segment after the freight market spurted by 25-30 per cent in the past 4-6 weeks.

Market up

"The freight market for bulk carriers which was ruling very low suddenly went up by 25-30 per cent in the past 4-6 weeks. It is still going up", an industry official said.

Consequently, the asset valuations of bulkers also rose by about 15-20 per cent. "The value of a handymax vessel worth $33 million-34 million about two months ago went up by about 15-20 per cent and is now ruling at about $40 million-41million.

"The owners encashed the opportunity and got a good price", the official said.

All the handymaxes sold were in the range of 45,000- 48,000 dwt each except for Mercator's 2005-built 56,000 dwt super handymax carrier.

It was the lone vessel of this type in Mercator's fleet and the company was unable to expand in this category.

Out of the 11 bulk carriers run by Mercator, 10 are panamax vessels.

Similarly, Varun sold the only bulk carrier in its fleet while Tolani and West Asia Maritime sold two bulker carriers each.

Century and Chettinad also exited the segment by selling one vessel each in this category.

The official said that the owners have come out of the bulk carrier segment to focus on tankers where the market is `firm' and the growing off-shore segment.