A total of USD 1.6 billion was spend on second-hand vessels in July 2016, compared to USD 3.1 billion spent in the same month last year, representing a drop of 48% in the total value of second-hand sales concluded in the period, according to data provided by VesselsValue.
Bulker and tanker sales were down 13% in July 2016, while the largest drop was seen in the container sector where only 2 sales were concluded compared to 31 in July 2015.
The bulker sector saw the largest number of sales as 44 vessels were sold during the month, worth up to USD 450 million, followed by the tanker sector with 41 sales valued at USD 1.1 billion.
Only 12 newbuilding orders were placed in July 2016, including six tankers, five containerships and one bulk carrier, a significant drop from July last year when 79 tankers, 82 containerships and 26 bulkers were ordered.
VesselsValue said that modern bulker values firmed throughout July, with Panamaxes showing the greatest rise. Older tonnage remained fairly constant, however, there were slight decreases within older Supramax vessels.
Additionally, VesselsValue said that the crude spot market softened further over the past months with VLCC, Suezmax and Aframax TCE estimates all coming close to hitting 2-year lows.
Bulker demolition sales increased by only 10% in July 2015, however, the total on water bulk fleet increased by 2 million dwt during the month as 3.2 million dwt were delivered and only 1.2 million dwt were scrapped.
A combination of low charter rates, over-supply of tonnage and the widening of the Panama Canal has seen an increase in the number of container vessels sent for demolition. 25% of those sales are vessels built 2000-2002, indicating some owners are not willing to put these vessels through their third special survey, according to VesselsValue.