Suezmax Sales and Charter Rates on the Rise

The strong performance of the VLCC segment in the global tanker market is increasing investor interest in Suezmax tankers. According to an analysis by Rebecca Galanopoulos published by VesselsValue, increased sales activity in the Suezmax segment is being accompanied by rising vessel values and charter rates. The fact that one-year time charter rates have increased by 301% year on year to USD 161,054 per day highlights the scale of the segment’s growth.

Since the beginning of the year, Suezmax tanker sales have risen by 35%, increasing from 92 transactions during the same period last year to 124. The continuation of buying and selling activity despite rising prices demonstrates investors’ interest in the segment’s strong earnings potential. The average age of vessels sold was recorded at 15 years.

Greek Shipowners Lead Both Buying and Selling Activity

Greece ranked first among buyers, accounting for 21% of purchases. The United Arab Emirates followed with 15%, while China ranked third with 8%.

Greece also stood out on the selling side, accounting for 33% of transactions. Dynacom sold nine Suezmax tankers during the year. China ranked second with a 9% share, while Belgium came third with 6%, following the sale of a combined eight vessels by CMB.Tech and Exmar.

Among the notable recent transactions was the sale of the 158,400 DWT Achilleas by Sun Enterprises for USD 98 million. Built in June 2010 at Hyundai Heavy Industries’ Ulsan shipyard, the vessel has an estimated market value of USD 100.47 million.

Maran Tankers also sold the 158,300 DWT Maran Poseidon, built in January 2010, for USD 98.5 million. The vessel’s estimated market value stands at USD 101.88 million.

Values of Older Tankers More Than Doubled

Rising VLCC prices have supported demand for Suezmax tankers by encouraging investors to turn towards more affordable alternatives. Increased buying and selling activity, together with higher freight earnings, has pushed up vessel values across different age groups.

The increase has been particularly pronounced among older tankers. The value of an approximately 15-year-old Suezmax tanker with a capacity of 160,000 DWT rose from USD 45.6 million at the beginning of the year to USD 106.97 million. The increase of approximately 134.58% highlights how significantly second-hand tanker prices have changed in a short period.

A similar upward trend has been observed in the charter market. One-year time charter rates have climbed by 301% from USD 40,151 per day last year to USD 161,054 per day. Disruptions to trading routes and tighter availability of suitable vessels have enabled shipowners to secure higher earnings under long-term contracts.

The ability to lock in higher charter earnings over an extended period is also supporting the increase in vessel values. While shipowners are looking to capitalise on current price levels, strong earnings expectations continue to sustain activity among buyers and sellers.

Suez Canal Access Gives Suezmax Tankers an Advantage

Operational flexibility is another factor driving demand for Suezmax tankers. Unlike VLCCs, these vessels can transit the Suez Canal fully laden. This allows them to serve trade routes between the Middle East, the Mediterranean and Europe without having to take the longer route around the Cape of Good Hope.

The ability of Suezmax tankers to access a wider range of ports and terminals also gives charterers greater flexibility across different trading routes. With vessel values and earnings in the VLCC segment reaching elevated levels, Suezmax tankers are emerging as a more affordable alternative.

Strong freight earnings, rising second-hand vessel values and operational advantages are among the main factors driving activity in the Suezmax market. Sales activity and price developments in the segment are expected to remain closely watched in the coming period.