More ship owners appeared willing to offload their older ships as 2020 nears its end. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “following the sudden drop in price levels from Bangladesh this week, there appears to be a level playing field across all the recycling destinations in the Indian sub. Continent, with all areas now in the thrones of the USD 400-410 per ldt numbers, however, equally important is the supply of the larger dry units escalating with more VLOC and capesize bulker being proposed to the market. This was one of the explanations for the Bangladeshi recyclers to decrease their rates from the beginning of the week as reports suggest that they became overwhelmed by the amount of larger dry units circulated and subsequently, corrected their indications back in line with their counterparts from India and Pakistan. Indian recyclers are certainly coming to the fore now on the back of their positive domestic steel market and are certainly proposing attractive numbers for HKC Green recycling tonnage, as evidenced by the cape sales reported below. Generally, the recycling market is, buoyant with global steel markets showing no sign of a downturn which leaves us to remain optimistic for this industry heading into the New Year and price levels maintaining its current stable stance. Away from the Indian sub. Continent, there are reports that China is close to announcing a decision on its two-year decision to ban foreign flagged vessels from being recycled on the local recycling yards. This would provide a big boost for the recycling industry if this were to happen and would allow ship owners additional capacity if considering green recycling. Time will tell if this proves to be the position from the Chinese authorities in the New year, although we should stress from local sources that the Environmental Department in China have provided no feedback on these reports as of yet. We do not expect any further decision in this respect until after the Chinese New Year (February, 2021)”, Clarkson Platou Hellas concluded.
Meanwhile, in its latest weekly report, shipbroker Allied Shipbroking said that “just a breath away from the end of the year, we continued to witness a fair amount of activity unfold in the ship recycling market, as more owners looked to offload some of their more vintage units at increasingly favorable price terms. In Bangladesh, demand has started to slow-down once again, as steel prices has posted significant losses as of late. The upward momentum that was seen in the previous weeks lost some steam, while India and Pakistan were able to regain the lost market share from Bangladesh. In India, it was an active week once again, with several HKC recycling transactions emerging.
On the pricing front things are looking to be fairly bullish as of late, with local steel prices helping to support this boost as of late. Meanwhile, the Indian Rupee has also strengthened this past week, adding more steam on the already increased appetite noted amongst breakers. In Pakistan, the recent stability in prices has played a significant role in keeping local breakers competitive for now. With breaker yards having still having most of their slots filled however, this could be a drag for this market during the final weeks of the year”.
In a separate report this week, GMS , the world’s leading cash buyer of ships, said that “after a surge that saw the Bangladeshi market rise too fast too soon, in addition to some steady progress made from the firming Pakistani and Indian markets, sub-continent destinations seem to have finally settled down a touch, in the run up to Christmas / New Year’s.As such, it was no surprise to see Bangladesh sink to the bottom of the sub-continent price rankings this week, whilst India sits atop the pile and Pakistan is not too far behind in second.
Meanwhile, the Turkish market has continued its upward trajectory in impressive form, with steel plate and imported scrap steel prices registering noteworthy gains this week (some not seen since the crash of 2008), while the Turkish Lira too registered an improvement of its own. On the sales front, a number of decently priced sales were concluded off of the back of recycling levels hitting USD 400/LT LDT (and above) this week, particularly in the Capesize Bulker and VLOC sectors. Moreover, 30 VLOCs have now been sold for recycling so far this year (with one more being concluded this week for an HKC green sale into India), in what has turned into the busiest sector to shed tonnage in 2020 thus far. In fact, even early 2000s built Capesize Bulkers are now being considered as recycling candidates, so low have charter rates fallen in this particular sector – down to almost breakeven OPEX levels at present and are likely to remain this way for the next 3-4 months at least. Covid cases continue to surge across the U.S.A. and Europe as we enter peak flu season and some more serious lockdowns have come into place in the U.K., Germany and parts of the U.S. (to name a few). Overall, it seems to be set to be a bleak midwinter for many and certainly not one that we are accustomed to as all hope for a brighter 2021 ahead”, GMS concluded.
Source: Hellenic Shipping
