Shippers take advantage of low used-vessel prices

Greek shipowners are making the most of the investment opportunities arising from a significant drop in used vessel prices, which have fallen 78 percent compared to 2008, despite the difficulties in obtaining funding from banks.

They remain the global leaders in new ship orders, aiming now at new-generation vessels such as liquefied natural gas (LNG) carriers. Since the start of the year, Greek shipowners have placed orders for new LNG carriers totaling least $1.8 billion, illustrating their determination to make a dynamic entry into this market, where charter rates are at very high levels at the moment.

According to a report by Golden Destiny shipbrokers, last week alone Greek shippers placed eight orders for new ships, representing 47 percent of all orders made during the second week of July.

Swiss Marine, whose major shareholder is the Restis family, ordered four dry-bulk carriers from China?s Dalian Shipyard, with a deadweight carrying capacity of 180,000 dwt each, for $44 million apiece, to be delivered in 2014. Chartworld Shipping Corp, owned by Lou Kollakis, has reportedly reached an agreement with Cosco Shipyard, also in China, for the construction of two dry-bulk carriers of 84,000 deadweight tons each. Neptune Lines, owned by the Travlos family, has ordered two ferries from South Korea?s Hyundai Mipo Dockyard, to be delivered at the end of 2013 or in early 2014.

According to Allied Shipbroking data, investment by Greek shipowners in secondhand vessels dropped in the first half of the year to $1.65 billion, from $2.28 billion in the same period in 2011, posting a 30 percent decline. However, the reduction in investment reflects the drop in ship prices between the two six-month periods, as Greek companies bought roughly the same number of vessels in H1 2011 and in the same period of 2012 — 82 last year and 85 this year.

Data show that Greek shippers spent $782 million on the acquisition of 41 dry-bulk carriers, $457 million on 26 tankers and $414 million on 18 container ships.

It is clear that Greek shipowners choose capacity over quantity when it comes to buying vessels. Hellenic Statistical Authority figures reveal that the total capacity of the Greek commercial fleet (including ships of at least 100 gross registered tons) grew in May 2012 by 2.5 percent year-on-year, against an increase of 0.5 percent in the same month in 2011 compared to May 2010. Capacity grew to 44.05 million tons this May from 42.9 million in 2011.

At the same time, the number of vessels in the Greek fleet shrank by 3.3 percent in May from the same month last year, following a 3.2 percent decline in the year before. The number of Greek-flagged vessels declined from 2,056 in May 2011 to 1,989 this May, dry-bulkers numbered 541, from 579 last year, tankers were reduced from 543 to 538 and ferries from 711 to 679.

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