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Demolition Market Active as Tonnage Sees Increased Demand

The ships’ recycling market has been rather active this past week, despite earlier estimates of a slowdown, due to the start of the monsoon season. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “the week has seen mixed emotions as some industry players were predicting markets to slowly decline locally due to the monsoon season in full flight. However, we have seen some cash buyers eager to acquire tonnage which has led to them driving up prices as recyclers look for more vessels with the limited offering and further speculation on future markets. Thus, another increase in price levels have been evident by the tanker sale reported below, which emphasizes the excitement created for a unit like this. For now, the dominant flow of tonnage will seemingly only come from the Offshore and Tanker sectors, but with the recovering Oil prices, the Offshore industry may choose to hold off a little longer and look to reap any upturn in benefits. Also, we are seeing a positive outlook in the global recovery after the Pandemic, which is showing strong indicators that we are returning to normal, further aided by the Vaccine rollout.

Source: Clarkson PLC

This recovery is also being seen in the global steel markets which is maintaining these strong price levels. This is being witnessed particularly in Turkey which continues to improve for both EU and HKC recycling. This, despite the financial difficulty in the country due to the dramatic drop in the Turkish Lira against the USD which would normally impact their buying power”, Clarkson Platou Hellas concluded.

Meanwhile, Athenian Shipbrokers also commented in its weekly report that the “ship recycling market again is moving up, the steel price remained firm. All Indian subcontinent markets have announced their Budgets which left the sub-continent market with positive signs while we move forward into the summer. Bangladesh market regaining its strength, although still behind Pakistan Buyers as they outbid them in most of the larger Ldt sales. India competes very well with market rivals despite the pandemic problem they face”.

Source: Athenian Shipbrokers S.A

In a separate note, GMS, the world’s leading cash buyer of ships, said that “all fiscal budgets in the Indian sub-continent markets have been announced in the past month or so, without any duties / taxes being levied on their respective domestic ship recycling sectors, and this has left all areas positively positioned moving into the summer / monsoon months. Of late, a marginal slowdown in the flow of fresh tonnage has given the sub-continent markets a bit of a breather, to regain their appetite and momentum ahead of a renewed push, at ever increasing and impressive numbers. Levels well into the USD 500s/LDT seem here to stay across the sub-continent markets for the time-being and for the foreseeable future as well, especially as steel plate prices remain relatively firm across the board and demand remains strong for any available units (mostly in the tanker and offshore categories). Finally, the Turkish market remains steady, with a marginal decline in imported steel reported this week. Yet, levels and demand, both hold firm.

Source: GMS

The Covid-19 situation continues to cause concern, particularly in India, although case numbers and fatality rates have finally been declining over consecutive weeks, where the government is doing its best to curb the spread. In other parts of the world, particularly the UK and the U.S., where they have accelerated their vaccine programs & are moving towards reopening in order to build herd immunity, other countries across the globe need to follow suit in order to try and get back to some form of normality before the end of the year”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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