Owners are cashing in on a bullish market, with the current box ship charter boom pushing up secondhand and newbuilding values
The feeder market remains very firm, although there was a slight fall in charter rates. There has been a pause in ordering as some owners worry about extra costs to cover the clean air regulations which came into force at the start of 2020. Over a four-month period there has been a fall in the order backlog of up to 5,000 TEU, to 293 vessels with a capacity aggregate of 571,311 TEU.
This compares with respective figures of 320 units totalling 619,025 TEU in mid-August. With 27 deliveries in this period, new feeders are still only just keeping pace with demand from the existing fleet. Most of the feeder tonnage is being built in China, both for export and domestic fleets.
Although it may be short-lived, owners are cashing in on the bullish market. Asset players are also making profits on resales and newbuild resales. The current box ship charter boom is pushing up secondhand and newbuilding values. Potential sellers can name their price and inspections of vessels for sale can now reach double figures, but some are just testing the market and are not serious buyers. Secondhand prices are now climbing high enough to rival the best charter rates on offer. The market offers good opportunities for profits if vessels are sold now. For newbuildings however, shipbuilders are in the driving seat since orderbook space is very full. With long delivery times, owners must judge whether they can wait until late 2021 or even 2022 before getting their ships.
Charterers are increasingly seeking green ships with low emissions. The battle to persuade charterers is being won but in the current bullish climate there is plenty of business around for everyone, so high carbon footprint ships are not necessarily harmed at this stage. Some delays on big box ships fitting scrubbers is providing spot business or short period charters to cover shortfalls on liner schedules.
On average in December, an 1,100-TEU and 1,700-TEU feeder could command US$6,220 and US$8,608 per day respectively for a 12-month charter. Other sizes over a one-year period yielded daily rates of US$9,892 (2,500 TEU), US$10,545 (2,700 TEU), US$11,230 (3,500 TEU), US$13,608 (4,250 TEU).
Some owners were lucky enough to gain two-year charters yielding US$13,660 (3,500 TEU), US$11,207 (2,700 TEU), US$11,720 (3,500 TEU) and US$13,669 (4,250 TEU). Although these were firm there was a slight fall of between 0.2% and 0.6% in the capacity ranges covered but hardly cause for concern. Indeed, owners are happy to gain longer charters now with trading prospects looking good in the medium term.
Container ships on order up to 5,000 teu
|Country of shipbuilder||Number||Total TEU|
|Jiangsu New Yangzijiang||21||39,507|
|China Shipbuilding Corp||11||29,800|
|Japan Marine United||8||24,288|
|PT Daya Radar Utama||3||300|
|Ben Thuy Shipbuilding||2||1,400|
|General Dynamics NASSCO||2||7,000|
|Xiamen Shipbuilding Ind.||2||4,800|
|PT Dhumas Tanjung Perak||1||100|
|Sinokor Merchant Mar.||24||34,400|
|Wan Hai Lines||20||48,744|
|ICBC Maersk Line||13||28,648|
|Quanzhou Ansheng Shipping||10||24,000|
|China Navigation Co.||8||20,400|
|Del Monte Fresh Fruit||8||18,200|
|Jiangsu New Yangzijiang||8||8,800|
|Shoei Kisen Kaisha||8||14,400|
|Sea Consortium Pte Ltd||6||16,200|
|SITC Marine Co||6||15,600|
|Korea Marine Trans||5||12,500|
|Evergreen Marine Corp||4||11,200|
|Lomar Shipping Ltd||4||7,550|
|SITC Ship’s Mgmt Co Ltd||4||4,034|
|1,001 - 2,000||134||200221|
|2,001 - 3,000||118||289354|
|3,001 - 4,000||21||69168|
|4,001 - 5,000||1||5000|