The ship recycling has remained under pressure, despite a few positive signs here and there. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “there feels like some renewed vigour in the market this week on the back of some slight gains from the Indian steel plate markets. Price levels for tonnage giving delivery to India have increased by a small margin, but any gain is welcomed following the recent gloomy months. We are starting to see more tonnage flow into the marketplace, most notably, the smaller container feeder type units, although one larger container (2001 built) was circulated for a recycling sale, but we understand there is reasoning behind this proposal”.
The shipbroker added that “Bangladesh and Pakistan look set to stand by the wayside whilst their financial woes continue and so we can expect to see more tonnage conclude to the Indian shores. One interesting point of note this week is from Turkey and the European Union. The European Union announced their new list of approved recycling facilities this week and, as predicted during the October Tradewinds Recycling Conference, two ship recycling facilities in Turkey have been removed from the approved list and therefore only six yards in Turkey are approved. This will therefore repeat the congestion for such recycling practices, similar to the last two years, should we see a sudden large volume of recycling candidates required recycling to an EU approved list. There has been one yard added in Bulgaria for the record”, Clarkson Platou Hellas concluded.
In a separate note, shipbroker Allied Shipbroking said that “this week saw a considerable improvement in the ship recycling market in terms of tonnage on the week before, thanks to the sale of a Capesize bulk carrier, even if the number of vessels committed for recycling decreased. The factors affecting Indian, Pakistani and Bangladeshi rates are little changed, but fortunes are perhaps starting to diverge with steel prices in Pakistan rising slightly as prices fall in India. Overall, December looks set to be a similar month to November, with a couple of larger vessels while the majority of scrapping consisting of small vessels. In terms of LDT sold for demolition so far this month, we see the number at around half of that of October and around a third of that of September. Owners with assets nearing retirement age will be hoping for a change of outlook in the New Year as a disappoint quarter draws to a close”.
Meanwhile, GMS (www.gmsinc.net), the world’s leading cash buyer of ships said in its latest weekly report that it was “another lackluster week has descended across sub-continent markets, with India once again suffering steel reversals, a Bangladeshi market paralyzed by L/C restrictions, and a Pakistani market that is still confused whether to dip in to the buying of whatever unit comes available. On the far end, Turkey continues its dead drift through the recycling stream as rumors surface about discussions with Aliaga Buyers regarding 2023 deliveries, in addition a degree of stability in its fundamentals noticed over the last couple of weeks. Overall, tonnage flow has started to increase as well – particularly in the container sector, which has come off significantly since the impressive peaks seen over the last two years.
Tankers too, continue to trade profitably whilst dry bulk markets (and Capes in particular) endure volatile weeks of fluctuations. Meanwhile, China’s relaxation of Covid restrictions is expected to bring some positivity back into the markets post New Year, as the world slowly gets back to normal after almost three years of varying degrees of Covid restrictions. On the global front, stock markets have plunged this week off the back of announcements of further rate hikes, in order to try and ease some of the soaring global inflation, as recession fears in the EU, U.K., and the U.S. loom ever larger. As such, for recycling markets, it is a slightly bleak and glum end to the year, with prices, economies, fundamentals, and sentiments showing no signs of stabilizing just yet, and thus, Sellers and Cash Buyers remain in a state of limbo when considering the sale of older assets”, GMS concluded.
Source: Hellenic Shipping News
