Value
How does VesselsValue calculate a Market Value?
To derive the Market Value (MV), we use an advanced mathematical model incorporating five key factors, specifically Age, Size, Type, Features, and Market Sentiment. This ‘five-factor model’ uses multivariate non-linear regression analysis, calibrated using transactional data over a period - usually three years, with the most recent transactions having the greatest weighting. By precisely weighting the transactional data’s impact on our value, we are able strike the ideal balance between reactivity and robustness. Our regressions are run daily, meaning the values produced for every vessel reflect the most recent market information. Vessels are divided into groups with similar operational characteristics and subject to similar market forces. The model is regressed and calibrated independently for each group.
For more information on our methodology please email us at info@vesselsvalue.com.
How does VesselsValue calculate Market Values if there have been no recent transactions in the sector?
If there are fewer than 10 sales per year for a particular sector, the sector is classed as illiquid. VV has developed an Illiquid Market Value Methodology which puts greater emphasis on newbuilding prices of vessels, interpolates with the residual value and is supplemented by sales and earnings data where known.
Why are similar vessels showing different values?
Two almost identical vessels may show different values due to differences in the age, features, or size of the vessel. You can look at the vessels’ features under the “Vessel Details” tab and compare them via the Fleet Database.
How do I understand the premiums or discounts a vessel is receiving in the algorithm?
On a vessel page, use the “Market Value Analysis” tab in the box to the right of the Market Value graph. This will show a visual representation of the premiums and discounts applied to the specific vessel. For client’s with a subscription, you can find our methodology here.
What features are included in the algorithm for valuation?
We award premiums and discounts based on a vessel’s specification which helps us to determine the most accurate value. These include builder, BWTS, engine, gearing, Jones Act, pumps, segregations, scrubber, tank coatings, plus many more. Features and their associated premiums and discounts are regularly audited, tested, and reviewed to check for accuracy.
Does VV consider scrubbers or BWTS when calculating Market Values for vessels?
Yes, we collect data for all Scrubber and BWTS fitted vessels. This includes fitted date and make or model where known. Both BWTS and Scrubbers receive a premium in the system.
Is the yard of build considered in the valuation model?
Yes, yard of build is taken into consideration. VV assumes that the best builders have no negative impact on an asset’s value. Hence, top quality (usually Japanese /S. Korean) yards receive no discount in value and other yards are then discounted from this point. The builder discount may vary between individual ship types and date of construction.
How often are the values updated?
Our regressions are run daily, meaning the values produced for every vessel reflect the most recent market information.
How accurate are the Market Values?
We measure our valuations against actual historical sales to test for accuracy. If you have a login, we publish a monthly accuracy report for all clients, which can be found here. Subscribers to “Deals Database” can also view VV’s accuracy in relation to recent sector transactions via the “Sales Analysis” page.
How can I easily see changes in the Market Values by sector?
From the dashboard home page, you will see the VV Indices on the left side of the screen. This is a quick way of getting a snapshot of market changes by weekly, monthly and a yearly percentage change, based on the overall fleet value. Additionally, you can use the “Matrix” to view generic Market Values by subtype and age for sectors you subscribe to.
How can I produce a Market Value Certificate for a historical date?
On a vessel page, select the date you require using the calendar. Once the page updates, the date box will turn pink. You can then create your ‘Market Valuation Certificate’ for the historical date.
Where can I find comparable vessel sales?
Subscribers to the “Deals Database” will be able to view comparable transactions at the bottom of the vessel page.
How is the Demolition Value calculated?
Demo Value is the amount in USD millions for which a vessel could be sold for scrap. Sometimes called the residual value or scrap value. The value is calculated from the LDT in long tons of the vessel and the scrap price per ton of steel for the sector based on the prevailing Indian Subcontinent USD/LDT rate. You can track our demolition pricing on the “Market” tab.
Why does the Newbuild Value for LNG and LPG vessels go back four years, but only three years for Tankers, Bulkers, and Containers?
The Newbuild Values for Gas vessels go back four years due to the longer build time we have historically seen in the construction of both LNG and LPG carriers when compared to other asset types.
Why are the values lower/higher than recently sold ships?
The Market Value of a vessel will broadly follow the trends of the comparable sale prices fed into our non linear regression algorithm. Analysis of future market sector sentiment is also built in. To reduce the volatility of Market Values, we stabilise any significant increases and decreases over several days.
Do you give premiums for certain design features?
We take the full specification of the vessel into consideration. Our in house team of Analysts monitor the relevant premiums and discounts assigned to standard vessel designs using the latest S&P, newbuild and chartering information.
The value of the vessel is not correct?
If you have an opinion that the value of a specific vessel does not appear as you would expect, please contact your Account Manager to raise a query. We will then investigate this through our Research and Analyst departments to ensure that the value is reflective of the current market.
Do you have a list of vessels available for purchase on your system?
We do not display Cargo or Offshore vessels which are for sale on our database. However, our sister company, Seasure Shipbroking, is available to discuss any S&P, newbuild, demolition or chartering enquiry you may have. Find out more here.
Why do you depreciate on a daily basis when vessels are sold basis their ‘built year’ and not ‘built day’?
We value vessels based on a their “Real Age”. This method considers the actual build date, to take into account a more accurate depreciation curve as opposed to looking at a vessel based on 12-month intervals.
Why has the market value of a vessel changed over the past couple of weeks/months?
This ‘five-factor model’ uses multivariate non-linear regression analysis, calibrated using transactional data over a period - usually three years, with the most recent transactions having the greatest weighting. By precisely weighting the transactional data’s impact on our value, we are able strike the ideal balance between reactivity and robustness. If, for example, a vessel is sold for a known price lower than its MV and subsequently included in our regression analysis, typically values for vessels of similar size and age will decrease. The opposite is also usually the case; if sold above its VV Value, values for vessels of similar size and age will typically increase. However the possibility of a sale having little to no impact on MVs is also plausible as the system calibrates against three years of data and many other factors are at play, e.g the delta between sale price and VV MV.