Demolition Market Heating Up
In a separate report, Clarkson Platou Hellas said that “as you can see from the sales collated below, the emphasis has centred around Pakistan this week on the back of price improvements, which may be the catalyst for the Bangladeshi cartel to take note, watch and learn, as they appear to be losing ground to their counterparts elsewhere on the back of their weaker rate limitations currently set by the cartel. Unless there is a sudden change in their ideas, the Bangladeshi recyclers could well be set for a lengthy spell on the side lines and it would be interesting to see whether extra pressure is placed on the cartel formation. As the lack of tonnage availability continues to bite, price levels in both Pakistan and India have increased this week, edging ever closer to the USD 400/ldt level. All signs suggest that if the supply of tonnage remains scarce, we may well see this ‘magical’ figure being passed in the upcoming weeks”.
In a separate report this week, GMS , the world’s leading cash buyer of ships, said that As we approach the final months of the year, the Indian sub-continent recycling destinations have settledinto a steady (but positive) pattern in the mid-to-high USD 300s/LDT, with some speculative positions still being taken by various players once vessels start working firm, primarily due to a distinct lack of available tonnage at present. Leading the way, as has been the case for much of this year, is a bullish Pakistani market, which has been back in the game after nearly two years out of the industry, due to a currency crisis and a couple of incidents on tankers that eventually lead to an enforced market closure. Bangladesh has been hamstrung by the formation of yet another cartel that is attempting to control prices and this has seen Pakistan retain their status as the number one sub-continent destination, as a majority of non-green market vessels continue to head to Gadani shores. In other interesting news, Chinese scrap steel prices continue to firm and they are now paying USD 360 – USD 380/LT LDT for scrap steel, translating to the price of a Chinese flagged Panamax bulker at region USD 350/LT LDT, with one domestic FPSO being reportedly sold to Chinese Recyclers at about USD 375/LT LDT this week. Finally, at the other end, the Turkish market continues its steady streak, with steel plate prices marginally higher, the Lira steady, and local demand for non-EUSRR vessels still prevalent. Meanwhile, Covid continues to wreak havoc across the globe, as second waves spiral out of control in Europe & other countries, and no other country (apart from the USA) has been harder hit than India, which continues to register phenomenally high cases approaching 100,000 per day once again. With the U.S. presidential elections now on the horizon next month and countries still grappling with the economic effects of renewed lockdowns once again, it will certainly be an interesting and (undoubtedly) volatile end to an unprecedented year.
Nikos Roussanoglou, Hellenic Shipping News Worldwide