The ship recycling market seems to have edged out of the “shadows” this past week, with activity quite notable. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “steady enquiry, steady flow of tonnage and stable price levels currently provide balanced market conditions for Owners to reap the benefits of any potential recycling candidate. There are some speculative numbers being placed on the bidding table for smaller container vessels that become available, particularly for Bangladesh delivery. The quantity of recyclers in Chattogram that are in a position to offer for tonnage continues to remain limited due to the Letter of Credit restrictions, however this speculation by some cash buyers all leads to the fact that we may soon be seeing an ending to this lengthy scenario. The recycling market in Gadani, Pakistan remains closed for the time being. With the Government placing a ban on the import of certain non-luxurious goods, this recycling destination looks set to remain on the back burner for some time.
Allied Shipbroking added that “after a long wait, some energy has returned to the ship recycling market and resulted in a week with respectable levels of volumes and tonnage committed for recycling. Bangladeshi breakers have offered some extremely competitive prices and have been able to source financing despite ongoing difficulties surrounding US$ spending.
However, it must be noted that these prices are at least partially supported by the inclusion of bunkers and/or spare propellers. Indian breakers’ dominance in the HKC field played to their advantage in a week which saw around 35,000 LDT committed for green recycling, and no real competition from Bangladesh on similar vessels for the foreseeable future. With financing issues tentatively held at bay for now, focus might shift for some Bangladeshi breakers to acquiring HKC green verification. Portugal became the most recent country to ratify the convention, putting some (perhaps short term) focus on those countries which are yet to do so, including Bangladesh itself”.
In a separate note, GMS (www.gmsinc.net), the world’s leading cash buyer of ships said that “this week, several more sales have registered as sub-continent ship recycling markets come roaring back – and a previously subdued Bangladesh starts to seemingly find some form once again, with some workable L/Cs from privately financed (rather than state controlled) banks. Despite the ongoing discussions about an IMF loan in the amount of about USD 2 – 3 billion, end buyers have been working to find alternate ways to pay for vessels for some time now and without the troublesome central bank approval, which is denying the disbursements of U.S. Dollars for everything but essential items.
Demand has seems hotter in both Pakistan and Bangladesh this week, where they have been unable to import vessels for most of this year and it is good to see several deals being concluded off late, and at firming numbers to match. India remains on the hunt for tonnage but has failed to keep up with a resurgent Bangladesh this week and will have to raise their respective game up once again, just to keep in contention to secure any available vessels. Finally, Turkey records a small drop in import steel prices whilst levels for ships hold firm for the past month now and still no news of any market fixtures coming forth. As the industry heads into March, the supply of tonnage has started to increase as dry (particularly Capesize bulker) rates suffer, and containers likewise show few signs of picking up just yet. As such, after a year of reduced supply and tumbling prices, we can finally see the recycling markets starting to resume fire again, and we should expect further impressive sales and pricing in the weeks ahead”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide