Summer Time Doesn’t Affect Demolition Market
In a separate note, Allied Shipbroking added that “despite the summer lull and the fact that we are in the monsoon period for the Indian Sub-Continent, activity in the demolition industry remains fairly intense with several units being sold for scrap this past week. Small tanker units are the majority of the recycled units, given the discouraging freight market in the whole tanker segment. Bangladesh remains the top option for the owners of scrapping candidates, as record high offered prices and the end of Eid holidays have boosted interest as of late. Meanwhile, a ramp up was noted in terms of demolition activity in India, after a prolong period of many difficulties for the local players.
The rising scrap prices and the gradual return in normality in the country have revived currently the interest from owners. It is expected enquiries to continue rise in the country, with domestic scrapyards regaining some of the lost market share. In Pakistan, it was not a very impressive week, as activity remained muted overall, despite the elevated steel prices and the strengthen of the Pakistani Rupee. However, given the healthy fundamentals and the attractive offered prices, it is likely to have another ramp up in demolition businesses after the end of the summer holiday period”, Allied concluded.
Meanwhile, GMS (www.gmsinc.net), the world’s leading cash buyer of ships added that “Indian sub-continent markets remain positioned on a largely firm footing, as a surprising shortage of tonnage keeps demand stuck high and prices propped up. The conclusion of Eid holidays has yet to see an increase in supply, despite the fact that the ongoing monsoon / summer holiday months could also be contributing to the overall sluggishness in the supply of units intended for recycling. After this week’s stock market turmoil and the Chinese crackdown on various sectors (including tech and education), there wasn’t an immediate & corresponding knock on-effect on the shipping & steel markets. However, there are lingering fears that such arbitrary and severe restrictions may eventually impact these industries on a global scale, especially since China is such a fundamental driver in the international economies.
In other news, Covid-19 cases are on the rise in the sub-continent markets once again – particularly in Bangladesh, which had recently loosened its restrictions and there is now talk of further lockdown measures to slow the spread of the highly transmissible Delta variant, as global efforts continue to ramp up to supply the much needed vaccines. India is also witnessing close to 50,000 fresh cases per day and about 1,000 fatalities per day. While these numbers are certainly down from the peaks of several months ago, these are still worrying statistics nonetheless. Even Turkish numbers are reportedly on the rise, with rumors of yet another lockdown in Turkey making the rounds. As parts of Europe and the U.S.A. open up again, there are still varying degrees of lockdowns – especially across Asia as the battle against Covid-19 nears the 2 year mark”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide