Bulk carrier S&P market experiences 'Dry January' as buyer/seller gap widens

Shipbroker Hartland Shipping Services highlighted the term Dry January aptly describes the current secondhand market, as reflected in the ’short sales table.’ While bids and offers continue to be made and negotiations are ongoing, analysts noted the gap between buyers and sellers is widening in many cases. Hartland believes buyers are seeking discounts due to the weak freight market, while sellers are either referencing December sales or waiting to see if earnings will improve following the Chinese New Year holidays.

Doric Shipbrokers echoed this sentiment, noting sellers are receiving offers below expectations and encountering figures that "reflect the present mood and potential direction of the market." Analysts emphasised owners willing to sell must navigate what appears to be a buyers’ market. Those who are unwilling to accept the current market conditions will find their vessels remaining on the sale shelves.

Imbalance amid value correction

This market imbalance may stem from the correction in vessel values observed since mid-2024, along with differing perspectives on the market’s future trajectory.

Cleaves Shipbroking S&P shipbroker Einar Straume told Riviera prices have declined by 25% to 30% since their peak in August 2024, with certain vessel types – particularly Panamaxes – experiencing even sharper drops in the past few weeks.

However, Mr Straume takes a more optimistic view moving forward, believing buyers and sellers could soon find common ground. “At these new, lower levels, we’ve seen an increase in inquiries, and some sales have been concluded. We sense some form of equilibrium is being reached, and prices may stabilise with more sales occurring in the near future,” he noted.

Growing interest in older vessels

Amid these developments, Doric Shipbrokers observed an abundance of vessels for sale, especially in the Handysize and Supramax segments.

Looking at last week’s reported deals, there is clear evidence older bulk carriers are still dominating the market. Hartland Shipping Services reported five vessel deals, with an average age of over 20 years.

However, despite the significant interest in ageing vessels at the start of the year, analysts believe if the value of older tonnage continues to decline, more ships will eventually be sent to demolition yards. “As values drop, the light displacement tonnage of ships over 20 years old gets more attention,” Hartland noted.