Frustration Reigns Supreme in the Ships’ Recycling Markets
Clarkson Platou Hellas added that “we have also now entered the period of Ramadan which annually brings little activity to the industry. With the lockdown in place and no answers as to when a re-opening is in sight, there is no surprise that Owners are reluctant to place fresh tonnage into the market knowing that there are still obstacles and complications on delivery. Also, we understand that if a Buyer is willing to table an offer, there will be clear subjects based on whether the recycling destinations open for business or not – leaving an Owner in a precarious position on arrival to the final agreed delivery place. With over 20 units still sitting at the outer anchorage in the three Indian Sub-Continent locations, there is still no clear indications as to when the Governments/Port Authorities will allow the importing of ships and when international flights will resume for the repatriation of Owners foreign crew. Next week may be a crucial time as the current lockdown dates in Pakistan (rumour that now extended till 5th May) , India (3rd May) and Bangladesh (5th May) expire – the inevitable feeling is that a further extension will be forthcoming, particularly in light of Ramadan now upon us. The most important aspect is the health of the people of these countries and sadly it would appear that Covid-19 is really hitting these countries hard, therefore all these Governments will have to seriously think about their reopening phases, thus what India has so far implemented hopefully will work for the local industry and environment and well-being of the people. Obviously, strict social distancing measures are in place on those yards operational again in Alang with a very limited workforce permitted onsite. What is now required are for the domestic steel mills to return with a positive and aggressive manner to bring about some demand of inventories, a relief for the yard owners”, the shipbroker concluded.
In a separate weekly note, GMS, the world’s leading cash buyer added that “this week, as lockdowns were once again extended at all subcontinent locations until May 15/16th, the toll on frustrated Ship Owners and Cash Buyers has started to tell. At present, there is no way to import fresh vessels into any subcontinent location for recycling and there are still a number of vessels at various anchorages that have arrived, but have failed to obtain permissions for boardings and / or beachings.Most of these vessels have missed cancelling dates between the Owners / Cash Buyers / end Users and are therefore subject to a return of the respective deposit or restructuring a new deal altogether, at whatever price the new market realities of today are. However, what makes matters confusing is that there is no telling where market prices realistically are at, given that a huge spread of numbers has been seen from Recyclers and Cash Buyers who are essentially speculating on a closed market that is presently much lower than it was at the start of the year. Currencies have also depreciated alarmingly across the board and it is quite clear that steel plate prices have fallen precipitously as well. As such, until activity fully resumes and steel mills start operating at pace once again, it will essentially remain a guessing game at the moment”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide