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Demolition Activity At a Standstill

Ships’ recycling activity took a nosedive over the past few days, as Diwali celebrations hindered the flow of sales. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “with Diwali celebrations continuing into the early part of this week, it meant that the week got off to a sluggish start and frustratingly never really recovered from this, with no new sales reported. This is due to many Owners still hanging onto their tonnage to reap the rewards of the freight market or still manage to find secondhand Buyers for their vintage units even when they are more inclined towards the recycling sector. Primarily, the firm freight markets, particularly the resurgent Container sector over recent weeks, where rates have almost doubled over the past couple of weeks, are ensuring tonnage supply for recycling remains minimal. This therefore leaves this market starved once again and means Buyers will have to wait a little longer before they are yet to see the inevitable wave of tonnage that many anticipate to be consumed in the New Year, especially from the tanker segment”, Clarkson Platou Hellas noted.

Source: Clarkson PLC

According to the shipbroker, “analysts seem to be agreeing that the overall winter market does not look promising as Tanker spot earnings remain in the doldrums, and thus may force Owners to reconsider their objectives as 2021 arrives. Domestically in the Indian Sub. Continent, price levels are continuing to improve with demand, particularly in India, rocketing as recyclers start to become ravenous for tonnage. This is the only positive at present and well-respected recyclers feel these firm prices should last until the spring, which is extremely rare for them to predict such forward optimism. The Cartel in Bangladesh has remained in place for another week, making it one of the longest running alliances from this destination as many are often dispersed of after only a few days. Is this a change in tactics from the breakers locally or is it that their resolve has not really been tested enough due to the shortage of tonnage? It may take some exciting units to enter the market to see whether this bond will be broken! Time will tell…”, Clarkson Platou Hellas concluded.

In a separate report this week, GMS , the world’s leading cash buyer of ships, said that “after exactly two months in operation, the cartel in Bangladesh has finally come to an end and End Buyers are free to offer their own prices, rather than relying on the lottery system / below-market prices on offer from the cartel, that saw them secure nearly no vessels during their relatively short-lived existence. From October 21 to November 21, a few powerful local Buyers had tried to commandeer the market and control prices in their favor – at a time when both India and Pakistan were kicking on, leaving Bangladesh trailing in their wake and doing very few deals. Demand in Bangladesh has been growing steadily and so it is no surprise that at the latest association meeting, they have decided to end it all and go back to the normal free market ways as certain End Buyers had already started to privately offer on tonnage being proposed from Cash Buyers that were potential Chittagong candidates. As the dearth of units continues, both India and Pakistan have also seen demand and fundamentals improve of late and it now seems that it may only be a matter of time before we start seeing USD 400/LDT breached on select units. Finally, after last week’s noteworthy improvement in the Lira and the fixing of several semi-submersible units, the Turkish market sailed through the week with no noteworthy news to report, especially as domestic fundamentals reported no major changes this week. In other news, GMS is pleased and proud to announce that the Leela Group of Ship Recycling Yards in India is the first to be awarded an ISO 9,001, ISO 14,001 and ISO 30,000 certificate by the ABS Group. The entry of one of the most reputable classification societies in the world, into the ship recycling industry, gives increasingly credibility to and further opens up the industry to global markets”, GMS concluded.

Source: GMS

Nikos Roussanoglou, Hellenic Shipping News Worldwide

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