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Ship Recycling Market Expects More Dry Bulk Vintage Tonnage

The ship recycling market could be set for a revival in the coming days and weeks, as more dry bulk vintage tonnage could be sold for demolition. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “with China implementing new lockdown regulations, the dry freight market was sent into further negative spins and therefore, we may now see more vintage dry units circulated into the market. A capesize bulker achieved a very impressive number this week, as per the sale listed below, with a good quantity of bunkers RoB. However, there are rumours the buyer may attempt to fix on a short trade, despite the poor sentiment in the dry sector, which could then justify the premium paid. If the sale is aimed towards a resale into Bangladesh and the hope of the Government once again allowing larger L/C’s to be opened (from the current limit of USD 3.0 mill), then unfortunately information obtained from Bangladesh towards the latter part of the week will not aide the Buyers resale structure.

Source: Clarkson Platou (Hellas) ltd

The shipbroker added that “information became apparent that new taxations may come be implemented as the Government aim to set reasonable prices of nine products, including flour, edible oil, lentils, sugar, rice, flour, coarse flour, cement and rods, within the next 15 days in an effort to bring stability to the country’s economy. There are even discussions of lawsuits being filed against anyone disregarding the designated prices. Pakistan is currently undergoing horrific flooding from the monsoon rains and the industry is really at a standstill for the time being. Our thoughts and prayers go to those currently suffering from these tragic floods. With the country still suffering from their currency woes, and the current flooding, little activity is expected for the foreseeable future”, Clarkson Platou Hellas concluded.

Meanwhile, GMS (www.gmsinc.net), the world’s leading cash buyer of ships, said in its latest weekly report, that “activity and availability of sales candidates seem to be finally starting to increase as we enter the month of September and the fourth (and final) quarter of the year. Dry bulk (and particularly Capesize bulker) rates have declined noticeably of late, and this is seeing an increasing number of enquiries on dry units starting to come forth for a potential sale for recycling. This increase couldn’t have come at a better time as local demand for tonnage has been gradually ramping up again, after an extremely quiet summer / flooded monsoon. Of course, after the collapse of the Sri Lankan economy earlier this year, difficulties persist in the sub-continent markets as both Pakistan and Bangladesh have been teetering perilously close to the brink as well”.

Source: GMS,Inc

According to GMS, “Pakistan has been beset by catastrophic flooding over the past week, with thousands of people losing their lives and millions displaced. In fact, some international media have been reporting that nearly one-third of the country is currently underwater. As such, calls for urgent humanitarian aid have reached the international community this week, with the situation becoming increasingly dire. Bangladesh is still struggling with L/Cs with any transaction valued at over USD 2 – USD 3 million needing Central bank approval, which is ensuring that most large LDT / higher value candidates are being diverted to competing markets and even the lower placed India, as Cash Buyers and Ship Owners both do not want to run the risk of getting stuck there, especially when levels have already fallen so much. India remains the most resilient market and is now becoming the go to destination (albeit at lower prices) for shipowners wishing to get their vessels delivered comparatively hassle and headache free, be it at a lower price. Finally, the Turkish market remains marginally changed from last week, as import steel and the Turkish Lira both report decreases during the week, all while local sentiments remain in the doldrums”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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