In May 2021, ADNOC paid US$85 million for the resale of Chinese-made VLCC CS Hunan Venture; three months later, the ship is worth US$91 million (source: CCS)
August 06, 2021by Matthew Freeman
Oil tanker values have risen across the board since January; however, rates remain near record lows largely due to oversupply of tonnage, says VesselsValue analyst Matthew Freeman
Pent-up demand after the easing of global Covid-19 restrictions, combined with low asset values at the start of 2021, led to a dramatic increase in the number of transactions observed and the value of assets.
To date, 2021 has been one of the best years in recent memory for both selling and buying, with asset values increasing across most sectors.
It is not only the used market that has flourished, but also scrap and new construction values that have seen strong improvements and show no signs of slowing down.
Oil tanker values have risen across the board since January; however, rates remain near record lows, largely due to excess tonnage supply. Older vessels saw the greatest increase, with 20-year-old VLCC values increasing by almost 30%.
This is due in part to a sharp rise in scrap metal prices which have risen from US$400/lt to US$600/lt since January, their highest level in more than 10 years.
The VLCC built in 1999 Macro sino was sold for further transactions in early January for US$20.5 million. The ship’s scrap value today stands at US$24.3 million. Another major contributing factor to the increase in asset values has been the introduction of buyers from the Middle East and China who have acquired tonnage for use on trade routes that are otherwise sanctioned for most other players. of the market.
More than 30% of all VLCC transactions this year have seen purchases by Chinese or Middle Eastern counterparties.
Modern vessels have benefited from an increase in value due, in part, to rising replacement costs, but also to the anticipation of a market recovery and the desire of owners and public companies to position themselves with fuel-efficient modern ships if, or when, it does.
In May 2021, ADNOC paid US$85 million for resale VLCC built in China CS Company Hunan. Four months later, the ship is worth US$91 million.
Aframax stocks performed well, again largely driven by sentiment and hopes for a quick recovery thanks to a sustained rise in the price of oil.
In January 2021, 14 years old Gloss rating was sold for US$12.8 million to Avin International of Greece. The ship is now worth a surplus of US$16 million.
Resale tonnage, however, has held up the best, with asset prices firming around 22% from US$42m in January 2021 to US$52m today.