Charter rates at a ten-year high have helped push up prices for second-hand VLCCs to above $100mn for the first time since January 2016, according to analysts VesselsValue (VV).
The VV value of a resale VLCC has gone above reached $101.36m as of 1 Nov 2019. The last time these levels were reached was between May 2014 and October 2015 and during the super cycle of 2007/2008.
According to VV, one of the major drivers of this change is charter rates, which have increased over 1,000% since 15 September 2019, peaking just above $200,000 per day on 11 October, levels that have not been seen in over 10 years. Although this has stabilised, it has had a profound effect on values. VesselsValue figures suggest a 20yo (1999 built) VLCC has experienced the most significant change, rising in value by around 27% since mid-September.
A number of deals have been concluded in this recent high earnings market, beginning with the 2010 Japan built Nagaragawa which sold on the 3 October for $48mn, versus her VV value today of $52.78mn. This was followed by the 2000 Japan built DS Commodore which sold one week later for $22.00mn and now valued at $24.1mn by VV. However, the sale that got everybody talking was Ridgebury’s en-bloc deal of three 2001 built ships for $98.00mn, equivalent to $32.60mn each.