Global maritime freight market and vessel valuation trends

The maritime shipping industry is experiencing significant price appreciation for secondhand vessels, driven by record-high freight rates and the immediate availability of ships. In the tanker segment, used oil tankers have seen prices rise by 26% since the start of the year. Specifically, five-year-old Very Large Crude Carriers (VLCC) have commanded prices roughly 16% higher than the cost of new builds to avoid the multi-year waiting periods required for new construction.

Daily spot income for VLCCs has surged, with rates on certain routes peaking at over $1.2 million per day. This economic environment is also impacting the ship recycling industry. High secondhand values and strong employment rates are preventing aging vessels from entering recycling yards. For example, the value of 20-year-old VLCCs has increased 90% year-over-year, creating a massive spread compared to their scrap value. Similar trends are observed in the Suezmax and dry bulk sectors, where high commercial incentives encourage owners to keep older vessels in service rather than selling them for scrap.