THE sale and purchase of secondhand containerships in the 18 months preceding July 26 show that an increasing number of"more non-traditional owners" have capitalised on the gloom of the recession months for a foothold in the containership business.

These owners bought secondhand vessels either to re-launch themselves into the trade or foray afresh, Alphaliner reports. While this is good news for the second hand containership market, the prospect of more capacity on the market leaves container freight rates more vulnerable.

Since November 2009, the average number of monthly transactions has increased two-fold over the average of the previous 10 to 18 months.  After an insipid performance in the third quarter of 2009, sale of second-hand vessels has soared by 65 per cent since the beginning of the fourth quarter of last year, on the back of an expectation of recovery in the containership market.

According to Clarksons' Shipping Intelligence Network, capacity of second hand vessel sales stood at 34,621 TEU in June 2009 at the height of the recession. Since then more than 27,000 TEU have been traded every month, as prices have been on the rise...

In the first six months of this year 96 ships exchanged hands in the secondhand market. First half sales mark the second highest sales reported after the 104 registered in the first half of 2004. However capacity of vessels sold in the first half of this year was 215,940 TEU compared to 168,669 TEU sold in the first six months of 2004, as more 4,000 TEU plus vessels were sold off by their owners.

Unlike the historical trend of time charter rates leading the secondhand vessel market rates or the reverse trend witnessed in 2009, this year both the containership secondhand price index and the time charter rate index recorded an increase in the first half, according to Shipping Intelligence Network.

Despite the improvement, secondhand vessel prices are however, still below the peak witnessed in 2008 according to Alphaliner. "Based on an index of 100 at January 2008, the secondhand sales index currently stands at 55 points. It had reached a low of 33 points in October last year as weak market conditions - triggered by a record number of idle containerships, low charter rates and lack of funding allowed some cash-rich owners to enter the market at bargain prices."

On the purchase side, Greek and Chinese companies were most active in the last 18 months. Greek shipowners bought 56 box units of 173,000 TEU, which represented 35 per cent of the vessels bought and sold since last January. Chinese owners' purchase of 33 vessels of 63,000 TEU accounted for 50 per cent of capacity "transacted" in the same period said Alphaliner.

Many of the Greek companies that have actively bought vessels are entities that are retesting the containership market after an absence of many years.