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Chinese Lunar Holiday Brings More Lull in Ship Recycling Market

Activity in the ship recycling market has retreated even further during the past week, as the New Year celebrations in China, curbed demand. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “a quiet week has been experienced due mainly to the Lunar New Year holidays that have taken place, but with dry and wet freight markets earning more positive plaudits from analysts, the supply side for ship recyclers looks set to continue to frustrate”.

Source: Clarkson Platou Hellas

“Whilst there remains much confusion surrounding the actual sale of the 10 Wan Hai container units, it now appears nine have been sold to India and one to a Bahrain yard. Seemingly, the price levels for the units destined for India are reportedly around the USD 510/ldt level. There are more container units currently being discussed within the market, however some that looked destined for the recycling yard are now receiving interest from Chinese traders. India continues to be at the forefront with offers for available tonnage and this destination looks hungry for vessels as domestic steel prices continue to rise”, Clarkson Platou Hellas concluded.

In a separate note, GMS (www.gmsinc.net), the world’s leading cash buyer of ships added that “following a virtually inert 2022 and a slightly busier start to 2023 at the various recycling destinations, much of the Far East was off celebrating Chinese Lunar New Year holidays this week and it has expectedly been a quieter period – in terms of sales and activity. A larger number of container vessels have so far been sold for recycling at the start of the year, and we are beginning to see signs that older dry bulk vessels with surveys due may follow suit in the near future as well. Additionally, following a glut of tanker vessels concluded for recycling at the beginning of 2022, this is the one segment that is still flying and it wouldn’t be entirely unsurprising to see any meaningful recycling take place from this particular sector any time soon.

Source: GMS

Prices and demand have also started to bounce back across Indian sub-continent markets (except Pakistan) and Turkey, although whether Pakistan and / or Bangladesh can open LC/s to import units remains an ongoing question of serious concern. Meanwhile, after a year of sustained instability and turmoil in 2022, currencies (except in Pakistan) have finally started to settle at their current lows and there is growing optimism (certainly in Bangladesh) that talks regarding an IMF loan may bring some much needed liquidity into the country so that end buyers can open L/Cs and import tonnage once again. Finally, steel plate prices in India, Bangladesh and Turkey were on a slightly upward trajectory this week other than Pakistan, where plate prices and the Pakistani Rupee recorded one of the worst plummets in recent memory”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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