The global financial crisis has influenced the dry bulk market severely and the situation in the sale & purchase market this month can only be described as chaotic and/or non-existing. With spot rates now barely covering operational costs and financing virtually unavailable, activity has been limited to renegotiations and cancellations of existing transactions. Given the lack of fresh transactions this month it is extremely difficult to provide correct and justifiable values for second hand vessels, however, we have (rightly or wrongly) largely based the below values on the figures descended from the Baltic Exchange Sale & Purchase Assessments panel. It should be noted that so far there are very few sellers willing to face such levels and most potential buyers are still awaiting even further drops before spending their precious money.
Sale and Purchase Tankers from the Platou Monthly October 2008
The lack of sales this month combined with current turbulent financial environment makes it very difficult to pin down vessel values. Vessel earnings are still reasonably strong, however there is clearly a weakening sentiment throughout. Adding to this, banks unwillingness to provide finance as well as general pessimism puts values under strong downward pressure.
The only relevant sale to report this week is the 2003 built SK Shipping controlled MR "Pro Diamond". We understand the vessel is tied up on subs at $ 47.5 million to Japanese with "market level" bare boat back. This price is in line with the Baltic Sale & Purchase Assessments (BSPA) which we believe to be the most reliable benchmark for secondhand values today. It is worth mentioning that this is down from $53 million in September.