Prices for older secondhand vessels in the VLCC market are rising faster than for younger ones, while newbuildings are unlikely to see any increase in the near future, according to shipping analysts at DNB Markets in Oslo.
The price of a five-year-old VLCC had risen to USD84 million, while a 10-year-old cost USD59 million and a 15-year-old was USD41 million, all up by USD2.0 million in the past week, they reported.
“The fact that older tonnage is appreciating faster than its younger sisters is in line with our forecast and we believe there is more room for secondhand asset price appreciation in light of the current strong crude tank market supported by oil producers’ continued incentive to maximise production and hence pour more oil into the market,” said Nicolay Dyvik, Oyvind Berle, and Petter Haugen, the DNB Markets’ shipping analysts, in a market report.
“Our one-year-ahead vessel price forecasts now leave 14% upside for five-year-olds and 24% for 10-year-olds.
“We do not forecast any upside to newbuild[ing] prices due to the highly competitive yard situation with lack of order backlog, falling steel prices and limited investor interest for funding new orders,” the analysts concluded.