Demolition Market Ends Year in Quiet Mode
In a separate note, shipbroker Intermodal said that “as we are reaching the end of 2021, the outlook in the demolition market remains the same as in previous weeks. The scarcity of fresh units continues to shape the offered levels of the Indian subcontinent buyers who have maintained the bids at mid-high $500/ldt. Bangladesh is leading the course, followed by Pakistan where breakers managed to secure a number of units before the end of the year.
Pressure remains on the Indian demolition market as the steel plate price correction has stalled buyers’ appetite for fresh tonnage at the time of writing. As a result, the gap in offered scrap prices with their Indian-subcontinent counterparts is too wide to allow them to compete for the limited vintage tonnage in the region. Lastly, in Turkey, both the domestic and imported scrap prices have declined last week. At the same time, the Turkish Lira has recovered a large share of its losses, hovering now at the mid-high 11.0/USD. However, the strong TRY fluctuation had an adverse effect on trading activity with the market remaining overall quiet. Average scrap prices in the different markets this week for tankers ranged between 330-600/ldt and those for dry bulk units between $320-590/ldt”, Intermodal concluded.
Meanwhile, GMS , the world’s leading cash buyer of ships said that “activity has cooled off significantly with very few fresh units being introduced into the market for sale. Notwithstanding, demand remains good – even at these reduced numbers – and it is surely a matter of time before some improvements in price are seen, given the stinging paucity of supply. This inactivity has come at something of an appropriate time, with levels in all sub-continent markets having declined by about USD 20 – USD 30/LDT, from the peaks seen in September – October. The falls in India have been far more pronounced, with about USD 50 – USD 60/LDT being knocked off vessel prices due to plummeting domestic steel plate prices. Quotes on certain less favored units are now coming in even below USD 500/LDT on occasion!
The Pakistan Rupee and the Turkish Lira have both seemingly settled, having depreciated to all time historical lows and there was time this past week for Gadani End Buyers to conclude a few units in Cash Buyer hands as well, and at levels not too far off where the top priced Bangladeshi market is at present. Chattogram Buyers have been active too in recent weeks, securing a Suezmax and an Aframax tanker at impressive levels above USD 600/LDT. Finally, the Turkish market saw the Lira firming and settling in around the TRY 10.48 mark by the time the week ended, and the volatility has resulted in prices declining by about USD 5/Ton and a complete halt to local trading. It is likely therefore to be a quieter end to the year as markets grapple with these new realities under the stark realization that there are very few fresh units to work”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide