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According to the shipbroker, “the main problem today in India is the finished goods/steel, which controls the import of steel, continues to fall daily. There remains a full flow of scrap metal being imported into India from all across the world which is not helping the ship recycling industry. There is an expectancy of a higher number of ships to become workable for recycling in the next few months and the prices due to such high availability will, per recyclers expectancy, fall further at least by 30-40 us dollars per ldt (Alang sentiment). With the ongoing foreign exchange obstacles in Bangladesh and Pakistan, the forthcoming months are one of trepidation and concern as to where the rates will level to. If Bangladesh resolves its internal financial restraints, we may see a bounce back and this, could occur in January according to local sources, however by then we may see a far greater number of vessels available for recyclers to pick and choose from. There are reports of a private cape being sold this week basis delivery Alang for region USD 520-525/ldt which is certainly creating a new benchmark”.
In a separate note, Allied Shipbroking added that “ship recycling activity remained subdued during the past week or so, with offered scrap prices and general demand from breakers being under constant pressure across all main destinations in the Indian Sub-Continent for some time now. At this point, it seems rather difficult to argue as to which specific demo sub-market will prevail on top under these unfavorable conditions. In India, things appear far from stable, with the recent news of reducing export duties, seemingly lacking any significant impact in terms of sentiment for the time being. Things remained rather unchanged both in Pakistan and Bangladesh, with the foreign exchange issues continuing to push down the overall volume of demolition transactions taking place within these countries. In terms of other demo destinations, the Turkish market remains on an uninspiring mode as well. Local steel prices there saw a slight increase, but it failed to translate over to any considerable change in the overall dormant performance of this market”.
Meanwhile, GMS (www.gmsinc.net), the world’s leading cash buyer of ships commented that “after the announcement by the Indian government that they would reduce export duties on iron ore and steel products, the Alang market surged by Rs. 4,000 (about USD 49) in a single day, only to come crashing down in subsequent days to the tune of USD 50/Ton by the time the weekend had arrived. In the midst of this surge, there was one Capesize Bulker sold for HKC / strictly green recycling into India, and it is hoped that some stability on prices will be found in the week(s) ahead. Notwithstanding, sub-continent steel plate prices have plummeted greatly this week (especially in India and Bangladesh), further adding to the ongoing stresses that have become routine in the sub-continent markets. Bangladesh remains on the sidelines with no new L/Cs being issued by the Central Bank and only a handful of private banks / local Buyers able to open L/Cs on (primarily) small(er) LDT units.
It remains a very cautious and tentative market across the board, with most Ship recyclers deeply embedded in a wait-and-watch mode, expecting prices to fall below USD 500/LDT and currently reluctant to dip into the market on fresh purchases until a some sort of a sustained period of stability is witnessed. Mercifully, the supply of tonnage remains low, despite dry bulk and container rates having cooled off considerably in the fourth quarter of this year. Owners have made decent money on their trading vessels this year and it seems they would rather hold and continue trading at these lower rates, rather than face the uncertain recycling realities of today. As such, it is not expected to be a frantic end to the year across sub-continent markets, but rather a trickle of candidates may arrive to the few keen and capable recyclers who are open to acquire ahead of an anticipated busier 2023”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
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