GEORGIA : The ship recycling market has witnessed the most interest from India this past week. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “India once again seems to be at the forefront of any offers being tabled, as the local market received a boost locally from the steel industry, which is giving the recyclers more encouragement to offer improved rates. We have seen increased offers this week for any tonnage that is available, but there remains a large spread on prices, which is showing how difficult it is to gauge the true value of ships in this market. For example, clients of MSC sold a private container for green recycling in India for a level region USD 547/ldt, yet clients of Sinokor concluded yet another container vessel for rgn USD 612/ldt. Whether this price is justified remains to be seen! Dry bulk and Tanker rates still seem to languish in the low-mid 500s for the time being confirming the recyclers preference for container units. Elsewhere, Bangladesh and Pakistan buyers continue to be frustrated with their domestic letter of credit restrictions and reports from the waterfront at Gadani, Pakistan suggest those units arriving for delivery, are facing delays at the waterfront prior to their subsequent beaching”.
In a separate note this week, GMS, the world’s leading cash buyer of ships said that “another week of astonishing activity has been reported from the sub-continent ship recycling markets, with Owners and Cash Buyers primarily focusing on the Indian market, where several extraordinarily priced container sales reportedly took place over the recent weeks. Indeed, the USD 600/Ton mark was even breached on a container unit once again, in what seems to be the surest sign yet, that sentiments and demand in Alang are back on track again.
Pakistan is not too far behind India, with some select Dry Bulk sales to Gadani Recyclers who are now re-emerging and have L/C approvals in place, whilst Bangladesh has been left behind in the doldrums during another dreadful week for domestic Recyclers there. Finally, at the far end, there seems to be some positive movement in Turkey as reports of a firming demand and optimism returning in the market, have come forth this week. Meanwhile, Indian local steel plate prices had gained about USD 13/LDT last week (as international steel prices simultaneously reported a 2% increase) and this week saw some further gains, before a slight tail off towards the end of the week”.
GMS added that “notwithstanding, Cash Buyers continue to speculate on units and this feverish buying could more than likely lead to some loss-making deals, just for the sake of having vessels in hand to sell. It all seems to be bubbling into some form of “vessel-concluding” obsession, so inexplicable has the fervor to acquire vessels become – and that too at seemingly unrealistic levels, even if that is at a price that is totally unachievable in today’s market. Only time will tell whether these recent purchases turn out well, especially on delivered units. But if Cash Buyers keep offering well ahead of the market and things turn south, we will witness similar woes to what we saw only a month or so prior, over the recently dire and depressed summer of declines and continual loss-making sub-continent recycling sales”, GMS concluded.