By MarEx 2015-09-29 10:08:50
Historical data shows VLCC values still have room to grow.
VesselsValue’s “Fixed Age Analysis” (pictured below) shows current values (yellow) Vs the historical distribution (grey bands) Vs the historical median (black) for different ages of VLCC’s. As can be seen, current VLCC values are at (or very close to) their average historical values. This could indicate strong upside potential in values if this hot charter market persists.
VLCC Fixed Age Fan Chart 01/01/2007 – 28/09/2015
Speaking about the tanker market VV CEO Richard Rivlin stated ‘VLCC values have not risen nearly as fast as rates as sellers are hesitant due to the high earnings they are achieving and the potential for values to keep rising. At the same time, buyers have been sceptical about how long this good market will be around due to the large numbers of newbuildings being delivered over the next 2-3 years. However, many are now starting to believe the market has legs and that there may still be some way to go. The historical data supports this as it shows that VLCC values are nearly at their historical average (median is used to exclude the excessive effects of the supercycle), while 2015 rates have been significantly higher.”
How to use the VV Fixed Age Analysis
The Fixed Age Analysis is an interactive tool the draws from VesselsValue daily updated valuation data. The user selects the vessel type (i.e. Capesize, VLCC, Feedermax, VLGC etc) and the historical period to be analysed (currently as far back as 2007). The charts display the relevant data in an interactive form.
There are two charts showing different versions of the analysis; a Fan Chart, and a Heatmap
The fan chart shows:
- the historical frequency of values for fixed age vessels of the selected type, broken down by vessel year of age (in years) and grouped into deciles (10 percentiles)
- the historical median for each age of vessel and time period selected
- the current values and preceding years values (as per 1st Jan of each year) for each age of vessel.
The functionality also allows the user to input and overlay one or more loans against the historical value distribution. This can be used for assessment of the potential asset value risk of a vessel purchase or financing
The user can also select or un-select any of the series and the scale will adjust automatically to allow for easy analysis.
- Quickly identify the historical context of current vessel values for different types and ages of vessels (i.e. potential upside, downside)
- Analyse the historical probability of achieving a specified (desired) value of a vessel (i.e. for IRR scenarios, loan to value covenants etc)
- Typical users include lenders, investors and owners