Intermodal: Low prices create large interest in used Panamax

The historical low prices on used Panamax brought the buyers into play during 2012, a year in which more than every fourth trade in the bulk market happened in that segment, writes Intermodal in its weekly report.

The bulk market's interest in acquiring used Panamax tonnage was surprisingly big in 2012, writes Intermodal in its weekly report. 26 percent of all trades in the S&P area happened in this segment, as opposed to 2011, where that number was 19 percent.

Greek shipowners, in particular, displayed a major interest in the segment, where especially the price on ships that are 10-15 years old seems to have dropped significantly. The price of a five year old Panamax is currently USD 17.5 million, which is significantly less than the USD 26-27 million that the ships cost approximately one year ago. For a 10 year old ship, the price is between USD 12-12.5 million, writes Intermodal, pointing out that a similar ship would have cost USD 21 million just one year ago.

However, the daily revenue of a Panamax dry bulk ship has also decreased significantly in the same period, putting it at approximately USD 8.000 per day for one-year charter, compared to USD 13-14.000 per day in November 2011.

As the price on newbuildings has decreased in the same period, from USD 29 million to USD 25.5 million, entering the 10-year-old Panamax segment is starting to make sense, according to the Greek brokerage firm. Today, the price of used (10-year-old) tonnage corresponds to 46 percent of the price on newbuildings. One year ago, the price corresponded to 70 percent.

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