Tanker Scrapping Continues to Dominate, As Prices Heat Up
In a separate note, Allied Shipbroking added this week that it was “a rather mediocre week for the ship recycling market, given the relative limited flow of units being sent to the breakers’ yards. In the Indian Sub-Continent, Bangladesh continues to hold top spot on the leader board, having already secured a plethora of larger LDT units (mostly tankers and FSU), especially as of these past few weeks. Moreover, despite the fact we haven’t seen any sales as of late, offered scrap price levels remaining firm, rather inline with the upward push in local steel plate prices. In India, local steel prices recovered quickly and to a fair degree, after the slump in the market of one week prior.
At the same time though, local forex levels still seem rather uninspiring. Notwithstanding this, local breakers remain “hungry” for any available tonnage, especially as we progress further into 4Q21. Finally, Pakistan seems to be holding its ground steady, eager to compete at high levels, despite its currency depreciation and disadvantaging position (compared to Bangladesh) in terms of delivery costs for the larger LDT units”, Allied said.
Meanwhile, GMS , the world’s leading cash buyer of ships said this week that “the last quarter jump in local steel plate pries (and at varying degrees) seems to have swept across all major recycling markets (including China) this week. The jump in levels varied from as little as USD 5/Ton from the Chinese market, all the way to USD 30/Ton on the Turkish end, with the sub-continent markets bridging the gap. Despite the dry sector continuing to perform surprisingly well and keeping the markets starved of bulker and container units, as holidays descend upon India and China, it is time to take stock of what has been another busy quarter of mostly tanker scrapping, as this particular sector looks to get back on its feet next year, following a heavy year of recycling.
Local port positions across all sub-continent markets confirm this, given the number of wet units being delivered to Recyclers on a weekly basis. Overall, it is expected to be another frantic finale to the year, as prices remain firm at historical levels at or above USD 600/LDT and tanker charter rates (for the most part) remain in the doldrums, providing an alternate lifeline to the ship recycling sector. We have seen very few bulkers and containers for a majority of this year – with even older 90s built units passing surveys to continue trading, such has been the strength of current freight rates. Whilst steel remains firm and the currency in India Pakistan and (especially) Turkey) have been facing their shares of wobbles over the last couple of weeks, we do not anticipate ship recycling prices to decline significantly any time soon”, GMS concluded in its report.
Nikos Roussanoglou, Hellenic Shipping News Worldwide