It took several weeks, but finally, tonnage supply could start falling again, on the back of increased sales of ships for recycling. In its latest weekly report, shipbroker Intermodal noted that “the demolition market has remained particularly busy for a second week in a row, with an impressive number of sales being reported in the past few days, while in terms of prices it seems that these remain stable for now despite the recent increase of appetite that seems to be prevailing in Indian subcontinent market. In terms of demo candidates, last week we saw vessels from a number of sectors being sold for scrap, with the most notable absence that of tankers. At the same time, cash buyers in Bangladesh keep increasing their market share effortlessly as the second most active market remains the Indian one, which in terms of prices is still about $/ldt behind. Average prices in the different markets this week for tankers ranged between $280-450/ldt and those for dry bulk units between $270-440/ldt”, the shipbroker concluded.
In a separate note this week, Allied Shipbroking added that “a rather healthy volume of transactions was noted these past few days in the ship recycling market. For yet another week, we witnessed a stable flow of units sent to the breakers, with the overall scene in the market showing a fair amount of stability now. In the Indian Sub-Continent, Bangladeshi breakers continue to hold the lead as the main ship recycling destination, with buyers there seemingly still holding an insatiable appetite. Indian buyers, are close behind, in pursuit of sustaining their market share for the time being. As for Pakistani breakers, we seem to still have minimal interest for competing right now and at current pricing levels, with offered numbers still lagging considerably against the rest of the Indian SubContinent. In the Med, Turkish breakers seem to be benefiting from the stability noted in local steel plate prices, though reported activity still remains at limited levels. All-in-all, given the current turbulent dry bulk freight market and relative firm offered scrap price levels, we may well continue seeing a fair flow of vessels sent to be beached, while also acting as a relief valve for the current excesses seen in terms of tonnage supply”, Allied said.
Meanwhile, in a separate report, GMS, the world’s leading cash buyer said that “sales of a diverse array of vessels continued at pace this week, particularly into the Bangladeshi market, which continues to increasingly get stuffed with large LDT fixtures and subsequent deliveries. VLOCs, Capes, Panamax containers, LNGs and PCCs have all made their way to Chattogram of late, as Bangladesh continues its impressive performance since the start of the year. There were (surprisingly) even a couple of green units committed to the only RINA certified HKC SoC yard in Bangladesh this week – albeit at (essentially) market levels. On the other side, India has continued to struggle for much of the year as it tries to secure its share of the market tonnage, relying instead on a stricter diet of vessels intended for HKC SoC recycling and the comparatively cheaper array of tugs and offshore units. Lastly (in the Indian sub-continent), Pakistan has essentially been relegated to focusing on small LDT vessels, with local end users remaining ever-so reluctant to compete with their regional neighbors, at levels at or even much above the USD 400/LDT mark, ever since the currency’s catastrophic depreciation last year. As such, Gadani’s port report is bleak for another week (save for the small LDT units), with most end Buyer plots empty and starved for tonnage for over six months now. Out West, the Turkish market’s recently improved condition has lead it into a state of limbo, with very few market fixtures being reported, marginal number of offshore vessels for green recycling arriving locally, and the local currency registering some worrying tumbles this week. Only local steel plate prices displayed a degree of stability for the third week in a row, which unfortunately remains insufficient in helping this market secure any tonnage. Overall in the industry, it will be interesting to see just how competitive the Bangladeshi market will remain, with most of the market tonnage heading there and at prices well into the mid-to-high USD 400s/LDT, as yards/capable end Buyers (in terms of LC/finance capabilities) continue to gradually run out”, GMS concluded.