Activity in Demolition Market Expected to Pick Up as Market Participants Come Together for Annual Conference

Ships’ demolition activity has been rather slow since the start of the year, amid market uncertainty. However, things could be set for a pick up in the weeks to come. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “it’s that time of the year again where many of those involved in the ship recycling industry congregate together at the annual Tradewinds Ship Recycling conference and amongst the speeches and discussions, there is usually an increase in rates and sentiment as cash buyers attempt to purchase any available unit to justify their trips whilst, as per the norm, the actual recyclers sit back and watch the episodes unfold before them with dismay. Will it happen this year? We shall see but the tension currently being witnessed between the Governments of India and Pakistan may put some of this activity on hold. Interestingly, Tradewinds have chosen Hong Kong to host this year’s event as it 10 years since the H. K. Convention came into effect and we should applaud the improvements made by everyone connected in the industry that has helped with the knowledge, guidance and financing which has brought to the table a safer surrounding for the local laborer’s and the environment despite extreme pressure from varying organizations”.

The shipbroker added that “we have started to see more talk and discussion inside the market this week with a large variety of tonnage becoming available, yet, this has still not generated into a flurry of actual sales. Commitments of tonnage can surely only be around the corner as this seems to have reignited the market and finally provide some long overdue activity which has been in obscurity since the start of the year. Roll on next week for the conference discussions/debates which may result in more sales conditions to report!”, Clarkson Platou Hellas concluded.

Meanwhile, in a separate report, shipbroker Allied Shipbroking said that “a rather interesting week in the ship recycling market, despite the overall restrained activity noted as of late. With 2 vintage Capesize units being concluded on an en bloc “as is, where is” basis, we contin-ue to witness a much more active approach in this size segment, which was mostly an “observant” during the most part of the previ-ous year. On the back also of the disappointing scene portrayed from the side of earnings, we may well start to see much more robust vol-umes taking shape in the dry bulk sector overall, something that would help keep breakers much more busy. In the Indian Sub- Continent, Bangladeshi Buyers continue to lead the market at this point in terms of pricing, while things in Pakistan remain rather stag-nant. India, on the other hand, is gaining a bit of traction as of late and given that there are some who fear of a tonnage pile up in Bang-ladesh, it would be of great interest to see how things will shift in the upcoming weeks. Finally, offered numbers seem balanced for the time being, with prices moving overall sideways on a week-on-week basis”, the shipbroker noted.

Meanwhile, in a separate report, GMS, the world’s leading cash buyer of ships for recycling said that “after some worrying declines at the start of the year, the Indian sub-continent markets appear to have stabilized of late, with Bangladesh (and now India) still positioned on a positive footing as we enter the third month of the year. Pakistan, as usual, remains uncompetitive (as it has been for much of the past 6 months or so) given its domestic steel reversals and a drastically depreciated currency that has seen Gadani finish at bottom of the pile for yet another week. Meanwhile, political tensions between India and Pakistan have been the talking point for much of the week – a situation, which thankfully seems to have resolved itself sensibly with the release of the Indian air force pilot on Friday. Finally, Turkey seems to be facing some minor jitters as local steel plate prices continue to reverse and local sentiment turns increasingly wary in the wake of. On the sales front, some larger LDT deals are in play – including Capesize bulkers, Panamax containers and a VLOC – and with the recent banking issues across the Indian sub-continent, Cash Buyers need to carefully evaluate which end Buyer is open and capable (in terms of LC limits) to take in such large units. We expect the EU regulations on the safe and environmentally sound recycling of ships to certainly be a topic of conversation, with EU flagged ships permitted to go only to EU approved yards as no Indian facility has been approved (as yet), despite several audits reportedly having taken place last year”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide