Improved Pricing Could Trigger More Tonnage Sold for Scrap
In its latest weekly report, shipbroker Intermodal said that ““with the exception of India which saw a depreciation in local steel plate prices that led to a small negative price’s correction during the last week, sentiment across the rest of Indian subcontinent regions improved substantially with average offered scrap prices setting beyond $400/ltd for both the bulker and tanker units. Pakistan has once again taken the lead with VLOC and Capesize units remaining significantly popular. Bangladeshi cash buyers, after their previous week short break, returned with improved scrap levels which exceeded the ones of their Indian competitors. In Turkey, the positive fundamentals which continue to emerge in the market have strengthened momentum for another week while we expect this positive trend to prevail in the upcoming weeks. Overall, demolition activity in terms of the volume of demo candidates was subdued during the past week amidst the Christmas holidays. Average prices in the different markets this week for tankers ranged between 275-430/ldt and those for dry bulk units between $270-410/ldt”.
In a separate note, Allied Shipbroking added that “with but a few days remaining before the year comes to a close, we can say that overall ship recycling market succeeded in finishing the year on a relatively strong positive tone. Offered scrap prices across the Indian Sub-Continent returned to levels relatively on par with those noted during the year prior. Even if this doesn’t seem so “bullish” at first sight, given the still ongoing pandemic situation, as well as the excessive volatility and the bottoming out levels offered during the 1st half of the year, these price levels are a fairly remarkable feat for this market. More specifically for this week, India lost its leading position (that it held for a brief moment), weekend by the softening trend noted in local steel plate prices. As a result, Bangladesh and Pakistan returned “firmly” to lead the pricing board. In terms of other demo destinations, Turkey continued on its upward momentum, with rising steel plate prices and a slightly more stable currency being of major help”, Allied concluded.
Meanwhile, in a separate report, GMS , the world’s leading cash buyer of ships, said that
“as Christmas holidays descend the world over, the sub-continent recycling markets are ending the year on a far happier and comparatively more of a bullish note than where they were come the mid-point of the year. Prices have come racing back to stand at levels similar to those at the start of the year, having collapsed by about USD 150/LDT during the year, as the world got to grips through the various stages of the Coronavirus pandemic. Of course, the virus continues to wreak havoc across the world to this day, with a reported new mutant strain being identified in the U.K. only this week, leading to harsher restrictions and global travel bans being implemented all over again.
Until the vaccine starts to be widely distributed and delivered, the world is going to have to accept living with the virus and enhanced social distancing and mask wearing measures that come with along with it, in order to try and curb its exponential and seemingly unending spread. In terms of markets, Pakistan and Bangladesh have both started to come back into the picture this week, as India has endured a slump of almost Rs. 1,000 (nearly USD 14) in plate prices over the last couple of weeks, sinking them to the bottom of the sub-continent price rankings once again (having briefly been atop for just a week). On the far end, even Turkey continues its unrelenting firming for the 4th straight week, with local steel plate prices up once again, Lira maintaining stability, and demand stifled with a healthy collection of deliveries over recent months. Supply overall remains mostly of the VLOC and Capesize Bulker variety – for HKC into India and otherwise, as owners remain tempted to sell for recycling again, now that rates have come back above USD 400/LDT”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide