Ship Recycling Activity on Hold
In a separate note, Allied Shipbroking added that “as the seasonal sluggish pace of the Chinese New Year festivities slowly fades away, the expectation is for some sort of spark to be seen in the near term, with further tonnage being pushed in this direction. However, thinking about the current freight levels seen in the dry bulk sector, it is highly unlike that we will see any firm levels of tonnage from this sector being concluded for scrap in the coming period (at least). Many market participants anticipate units from the tanker and offshore sectors to emerge as potential demolition candidates during the course of the year, especially for those which are close to their survey (and BWTS installation) dates.
In Bangladesh, things seem rather blurred at this point, given the strong number of vessels being concluded in previous months and the current “unwillingness” from breakers to perform close to their previous firm price levels. Things will depend significantly on the current rise being noted in local steel plate prices, in order to experience a rebalancing in the near term. In India, despite being currently at a competitive disadvantage compared to the rest of the Indian Sub-Continent, the improving steel plate prices and favorable currency movements have added a glimpse of “optimism “ in the market there”, Allied noted.
In a separate report this week, GMS , the world’s leading cash buyer of ships, said that with Chinese New Year holidays drawing to a close, mills in China are starting to order product once again and it is no surprise to see steel plate prices in all of the sub-continent markets creeping back up as material starts to shift to one of the chief purchasers. As such, the February lull witnessed across all sub-continent markets may finally be ending as sentiments and prices turn back to positive. Having said that, there remain very few firm and workable candidates in the market at present, with many freight sectors (particularly dry bulk and containers) still performing well for the time-being.
Moreover, with both sectors still struggling, there is also expected to be more tanker and offshore tonnage for sale as the year progresses, along with those vessels where it may not make economic sense to pass SS / DD and install BWTS. The Bangladeshi market has seen a plethora of units already arrive during the start of this year, as prices surged upwards towards the mythical USD 500/LDT mark, before the most recent crash by about USD 50 – USD 60 /LDT. 4 VLOCs along with a multitude of dry vessels (mostly Panamax and Handy bulkers) have seen well over 200,000 LDT arrive for beaching in just one month. On the other side, Pakistan has also come creeping back of late and India (although bottom placed of all sub-continent markets) remains firm to buy HKC and any specialist (non-ferrous) units coming their way. Finally, the Turkish market recorded another improvement last week, with steel plate, imported steel, and the Turkish Lira, all firming by the time the week ended and the decline in vessel prices finally stemming.
As such, all will therefore be hoping for a busy post CNY period with markets back in full swing!” GMS concluded
Nikos Roussanoglou, Hellenic Shipping News Worldwide