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Παρασκευή, 9 Ιουλίου 2010

Hellas: Ship owners grab 166 ships for a total of $5.5 billion in first half of 2010

Friday, 09 July 2010

The month of June proved to be a record breaking one for Hellenic shipowners’ investments in the second hand market, as they snatched a total of $1.34 billion for the acquisition of 44 dry bulk carriers, according to figures compiled by N. Cotzias Shipping Consultants.

This record number of agreements led them to first place so far this year. According to the report, during the first half of the year, Hellenic shipping interests have acquired a total of 166 units (both wet and dry), against 135 of the Chinese ship owners.

Hellenic ship owners have so far spent a staggering $5.5 billion, if one considers the difficult market conditions, particularly in terms of financing. By contrast the Chinese have invested $2.2 billion.
Cotzias noted that “the Greek fleet has increased by 11.7 million dwt carrying capacity while the Chinese acquisitions have given them 9.5 million extra deadweight. June 2010 was a weird month. Dry bulk freight levels have decreased by 45% while ship prices have held strong. The ongoing ship sale activity was strong, and it is worth noting that the Hellenic buyers were the ones that dominated the market as they have spent more than $1.35bilion usd for 43 ship purchases in June 2010 alone.

They have spent 3.55bilion usd in these first six months, and have acquired 134 ships. We are curious to see how the market will behave following the near crash we are experiencing in the freight market. Will ship prices follow the collapse in the indices, will ship prices become more realistic and pose some good investment opportunities for the cash investor? Will good deals enter in to the dry bulk secondhand market? We are waiting anxiously to see how long will the suppressed freights last and how quickly prices will readjust” commented the shipbroker.

Nevertheless, for the first time since April 2009, the Hellenic ship owning community has returned at the top of the tables, in terms of second hand market acquisitions. Cotzias mentioned that it is interesting to note that up until last month, China was leading with 117 purchases as opposed to 89 for the Greeks.

Off course if it wasn't for Peter Georgiopoulos it would have still been the usual Chinese dominance scenario, but thanks to his 24 units plus 6 for Technomar and 5 for Newlead Greece has performed a record number of dry bulk purchases of 44 units in one month only, and that has never been seen in the past” he said.
Meanwhile, despite an almost seven week fall of the dry bulk indices and rates and despite the fact that most ships are looking for cargoes that just aren’t there, prices remain very expensive, ranging higher from 15% and up to 35% compared to one year ago (depending on age and size of each vessel).

“What is strange enough is that the prices have not fallen a single cent! Why? Is it the volatility that has increased in the freight markets, that is keeping everyone comfortable that whatever downhill we may be experiencing right now, will be short-lived and will be offset soon by an equivalent if not larger and more rapid increase in the freight market that will eventually lead to once more higher ship prices?

Well that could be everyone's wishful thinking scenario, but in practical and realistic terms could not be applied. Why? Because as we mentioned last month, there was an anomaly in high freight rates, a booming shipping industry and the world economy still collecting its pieces. How could we have a healthy shipping market, when the world economic fundamentals still suffered?” wonders rightfully Cotzias.

Commenting on the current state of the freight market, the broker said that price agreements between iron/ore exporters/producers and importers are there and since July 1st China will have to agree to more expensive price per ton, for the imported iron/ore.

“So China has clearly opted to alter the quantities imported and shipped into China, by choosing to consume domestically produced iron/ore instead. Falling commodity prices have also affected the shipping markets. Traders choose to postpone commodity quantity purchases as the falling commodity price in itself dictates that if you don't need it right now... leave it for later as you will buy it cheaper... and by creating an "artificial scarcity" in the freight market by putting practically "no cargoes" out there, they will also reduce their subsequent transportation costs”, states Cotzias, ending his analysis by warning that it’s a charterer’s market and will remain so for a long time.
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