Ship Recycling Activity Enters “Slow Season”
In a separate note this week, Allied Shipbroking added that “broadly the market remains in similar position as it was the week before as Indian breakers continue to bid higher and out compete their Sub-Continent neighbors. Although well below the very firm price of the ‘Fortune Trader’ in the preceding week, the $580/LDT for the ‘MSC Jasmine’ is in-line with the market, the bunkers likely supporting the price in the face of the restricted yard list.
The sale marks the 12th MSC boxship sale for recycling so far this year and green-sales could be a boon for Indian yards which are well ahead of their peers in terms of green-processing capacity. The four tanker sales make for one of the busiest recycling weeks for the sector so far this year, which has lagged well behind the scrapping seen in 2022 – only 25% of the number of tanker sales seen last year despite being 75% through the year – and seen vessels on average 4-5 years older than was the case last year. Now that tanker earnings are somewhat more average than in recent months, we could see them boost the ranks of container and bulker vessels liable for demolition in the near future”, Allied said.
Meanwhile, in its latest weekly report, GMS, the world’s leading cash buyer of ships said this week that “despite the impending onset of various holidays at the recycling destinations, India remains firmly poised giving sub-continent markets a real boost over recent weeks and even as the industry heads into Q4 of the year. While Indian aggression may ease up a touch as Diwali holidays descend, it is expected that Pakistan, and perhaps even a decidedly lackluster Bangladesh, may eventually step up in the weeks and perhaps even the final few months leading into 2024, helping secure any of the remaining unsold tonnage, or fresh ones that may hit the market down the line. A recently resurgent Pakistani market has witnessed an unexpected decline over the last couple of weeks as the few Buyers that were able to obtain L/C banking limits, managed to book various vessels (mostly Panamax Bulkers) thereby filling their plots quickly through August.
Bangladesh is likely to remain out of the buying for now, at least as long as they continue to insist on clearly presenting unworkable numbers below USD 500/LDT and while competing markets are unequivocally offering higher and faring far better. On the far end, even though prices remain unchanged, a handful of Turkish Buyers have reportedly been offering extremely firm levels to snag a rare unit that is reported on offer to local Buyers. Meanwhile, the supply of containers remains strong as some raucous pricing from Alang has meant that owners have been justified lately, in selling their vessels close to and (in some cases) above that magical USD 600/LDT mark. Dry Bulk charter rates have also seen a slight improvement over recent months, but the supply of vintage 90s built and older Dry vessels should become strong towards the end of the year – and well into 2024”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide