Low ship prices a bargain, but few ship owners can afford them

The lack of financing is the main reason behind the diminishing number of deals in the second hand market for ships, as evident by the low numbers of vessels changing hands.

According to figures compiled by Allied & Shipbroking, from the beginning of the year Greek ship owners have invested a mere $266 million, when during the same period of the previous year they had put down a whopping $1.3 billion. Owners have bought only 13 ships through the second hand market, against 25 vessels bought one year ago. As one can notice, the double number of ships of last year required almost nine times more money, which is a further testament to the drop in values. While Greek owners are keener in dry bulk carriers, investing $217 million for them, against only $48 million for tankers, US buyers are opting for the opposite direction. From the beginning of 2009, they have invested $219 million for tankers and only $2.65 million for dry tonnage. The second hand market at the moment presents solid investment opportunities, with values plunging as much as 50% on average in the dry bulk segment. The drop is even higher in older dry bulk tonnage reaching a massive 75 percent. But with the recent rebound of the freight market, with the BDI now exceeding 2000 points, even older vessels can achieve respectable earnings, thus rendering them a rather safe bet among investors. So far thought, it is mainly Chinese who are rather active in securing older tonnage, according to reports by shipbroker George Moundreas & Co.

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