Current situation of second-hand ship trade in China

Affected by the popularity of new shipbuilding orders, second-hand oil tanker prices have seen an increase.

According to the data of China Ship Economic Research Center, the second-hand ship price of the five-year old Aframax tanker has reached US $62.5 million recently, with a year-on-year increase of 27.6%, and has reached 95% of the new ship price of US $65 million.
This means that the price difference between second-hand and new ships with a ship age of five years is already very small. According to the report of Nihon Keizai Shimbun in April, the prices of oil tankers over 15 years old and older are also rising sharply.
Aframax tanker is a kind of tanker with a load of less than 120000 tons and a width of more than 32.31 meters, which is mainly used in ports of non OPEC oil exporting countries.

             
According to a report by British research firm Vessels Value, the second-hand prices of MR tankers have steadily increased since 2022 and reached their highest level since October 2008 in April of this year. MR type oil tankers usually refer to finished oil tankers suitable for medium range transportation.
Vessels Value predicted in March that the prices of five-year old oil tankers would maintain a quarterly increase of around 5% until 2023-2024, with a turning point at least until 2025-2026.

According to Clarkson's research data, the price ratio of second-hand ships and new ships has reached a new high in 13 years.
The ship price ratio refers to the price ratio of ships, which is the ratio between the second-hand and newly built prices of similar ships. It is a typical indicator of the shipping market. By calculating the ship price ratio, it can be understood how willing investors are to purchase second-hand ships that have already been put into operation compared to new ships that have been signed and ordered with a delivery time of 2-3 years.
The ship price ratio to the benchmark is generally 80%. Clarkson's latest research found that the ship price ratio of all major sectors of oil tankers is higher than the benchmark.

                                
Among them, the ship price ratio of Aframax tankers is currently 95%, which once reached 100% at the end of January this year, the highest ratio since the 2008 financial crisis. The ship price ratio of VLCC for ultra large oil tankers is 82%; The price ratio of MR finished oil tankers is 92%.
Clarkson said that the ship price ratio of Aframax tankers reached about 110% in 2005.

The recent increase in international second-hand oil tanker prices is mainly affected by the increase in new ship orders.

A large number of new ship orders are facing constraints from relatively insufficient production capacity in shipyards.
The Shanghai Securities Journal quoted the opinion of industry insiders that a large number of orders for container ships, LNG ships, Roll-on/roll-off ships, etc. were generated in the last two years, and the global shipyard capacity has been relatively saturated. Now it is difficult to place orders for new shipbuilding.

According to the analysis of vessel value data in April by Vessels Value, tanker orders were active in April this year, with a total of 39 new contracts signed. There were a total of 85 new shipbuilding orders for oil tankers in the first four months of this year, a year-on-year increase of 250%.
Greek shipowners account for over half of all new orders, at 54%; Next is Japan, accounting for 25%; The UK and the UAE are tied for third place, each accounting for 5%.

According to China Shipowner Network, from January to March this year, the new shipbuilding market traded 11.87 million corrected total tons (CGTs), a year-on-year increase of 16.2%, 17% higher than the average transaction volume for the same period in the past five years (2018-2022).
Except for the relatively low transaction volume in January, the new ship transactions in February and March remained at a high level, and the total transaction volume in the first quarter of this year has reached 27.7% of the entire year last year.
The corrected total tonnage is the compensation total tonnage, which is obtained by multiplying the total cargo volume of the ship by the coefficient of the ship type.

Currently, global CGT handheld orders continue to grow.

As of the end of March, global handheld orders amounted to 115 million CGTs, a year-on-year increase of 21% and a month on month increase of 1.8%.
On the Chinese side, from January to March, China completed 9.17 million deadweight tons of shipbuilding, a year-on-year decrease of 4.6%. Undertake new ship orders of 15.18 million deadweight tons, a year-on-year increase of 53%. As of the end of March, China's orders for handheld ships reached 114.52 million deadweight tons, a year-on-year increase of 15.6%.

                                   

According to a report from First Financial, China Shipbuilding (600150. SH) stated that the shipbuilding industry is currently in an upward cycle, and its orders have been scheduled for 2026.
As of the close on May 16th, the stock price of China Shipbuilding Industry Co., Ltd. closed at 28.76 yuan per share, up 0.52%.

If you have the following requirements: New ship manufacturing/ Second-hand ships trading/ Ship quality assessment/ Equipment maintenance/ Connecting Chinese ship brokers/ Third-party ship transaction guarantees service.

Visit: www.vesselslink.com

Contact: contact@vesselslink.com