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More Green Ship Recycling Under Way, as Ship Owners Are Selling Older Vessels

Ships’ demolition activity has been on the rise over the last couple of weeks. In its latest weekly report, shipbroker Clarkson Platou Hellas noted that “We have witnessed several more units entering the market fray this week and as we edge closer to the end of the year, it will be interesting to see how many more units will be sold for recycling before we arrive in the next decade. Whether Owners are just dipping their toes in the market to ascertain the value of their aging vessels remains to be seen. Frustratingly, for those involved in the recycling industry, trading buyers remain on the peripheral and acquiring the overaged units that should really be destined for the breaking yards. Therefore, whilst we are seeing a considerable amount of more units in the market, actual recycling sales remain limited. There is however certainly more momentum in the market this week and seemingly, more demand from the waterfront in all the three destinations in the Indian sub. Continent and having all three areas in play once again can only help to kick-start sentiment and provide improved rates. Once possible detriment to this is however is that unfortunately, the Bangladesh steel markets have weakened daily this week, nothing dramatic, and as a consequence, all gains recently made look set to return to the previous lower levels that were on offer”, Clarkson Platou Hellas said.

Similarly, Allied Shipbroking added that it was “a rather interesting week for the demolition market, with a good flow of candidates being seen in the market, especially under the HKC green recycling convention. It was about time that we started to see a more robust face in the recycling market, after a prolonged period of subdued levels being reported. In the Indian Sub-Continent, the scene, however, is yet rather patchy. The Bangladeshi market eased back a bit the past few days in terms of fresh interest, while given the volatility of this market, it is difficult to point out whether it is the beginning of another bearish mood taking shape. On the other hand, India is on an upward momentum, both in terms of local steel plate prices and activity being noted. With Pakistan following closely, but still lacking the performance, it is yet to be seen if competition amongst the main recycling regions is now on the rise. Finally, amongst the other ship recycling markets, Turkey is finally shows a some sort of stability, albeit a “fragile” one given the lack of tonnage moving towards this direction”.

Meanwhile, in its latest weekly report, GMS, the world’s leading cash buyer of ships noted that “going into the final furlong of the year, virtually all markets seem to be positioned positively and activity has started to ramp up, with Ship Owners keen to exploit some of these better offerings on show, before costs on ‘as is’ vessels (ballasting the units to the subcontinent markets) start to significantly increase with the new (and higher) Sulphur fuel regulations that will come into effect from January 1st, 2020. There is therefore a frantic scramble by Cash Buyers, to try and get their recently acquired high-priced ‘as is’ vessels delivered within December 2019, and many Owners on delivered deals are starting to run tight on time, given that the canceling date on most deals is tabled approximately four weeks after the date of fixture”.

GMS added that “on the local markets front, Bangladesh has been the most hungry and aggressive of the recycling markets of late, but these spurts of activity tend to be followed by a period of complete apathy and dissipating numbers – with Cash Buyers diverting vessels elsewhere in order to stay in the green. While India has also started to compete in the mid-to-high USD 300s/LDT on any available and well positioned vessels, Pakistan surprisingly isn’t too far behind and as it stands, all markets will have to remain on point, in order to secure their share of tonnage in the final month of the year. Lastly, the Turkish market continues more of the same performance from previous weeks, with the firmer fundamentals that have been unchanged over the last couple of weeks, and the unrelenting shortage of tonnage that has been putting the squeeze on Turkish Recyclers”, the report concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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