Second-hand ship values fall the most in 3 1/2 years

The price of second-hand commodity carriers dropped the most in three and a half years after ship-hire rates tumbled.

Oil-tanker prices also slumped. The price of five-year-old capesize ships that normally haul about 160,000 tons of iron ore or coal dropped 3.2 per cent to US$144 million, according to weekly prices from the London-based Baltic Exchange. It was the biggest drop since June 2004, when prices fell 14 per cent. Prices for every class of commodity carrier and oil tanker assessed by the exchange fell. Very large crude carrier, or VLCC, prices slipped US$800,000 to US$134.5 million. There have been record declines in the cost of transporting dry-bulk commodities and oil-tanker rental rates have slumped. The Baltic Dry Index, an overall measure of the price of shipping coal, grains and iron ore, fell 19 per cent in the five days to Jan 18, its biggest weekly fall since the exchange began compiling the data. The Baltic Clean Index, which indicates the price of transporting refined petroleum products including gasoline, jet fuel, naphtha, diesel and gasoline, has dropped 17 per cent since Dec 6.

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