Kuwait scraps single-hull VLCC trio in record $35m deal.
KUWAIT Oil Tanker Co sold three single-hull very large crude carriers for scrap last week, in a record deal worth nearly $35m, writes Brian Reyes.
The vessels will likely go to breakers in Bangladesh, pushing the total number of VLCCs sold for demolition so far this year to seven.
Bangladesh remains the top destination for vessels of this type, though the Kuwaiti ships could yet end up in India or Pakistan.
These relatively young vessels formed part of a disposal programme aimed at meeting the requirements of the single-hull phase-out deadline.
?It was first thought that trading, conversion or storage interests would be the ones to make the boldest moves,? said US-based cash buyer GMS. ?As it transpires, the vessels went for recycling.
?This takes the total number of VLCCs sold for recycling this year to seven, with more expected in the next few weeks.?
The 1992-built, 32,025 ldt Al Tahreer and the 1991-built, 32,025 Al Awdah were each reported sold for lumpsums of $11.7m, while the 1992-built, 31,440 ldt Al Shuhadaa was reported sold for $11.5m.
The sums paid were the equivalent of around $365 per ldt, a rate lower than recent VLCC deals closed at near to the $400 per ldt mark.
KOTC will take delivery of the first of four new VLCCs from South Korea"s Daewoo Engineering and Construction ahead of schedule next October.
The Kuwaiti company recently won approval to place new orders and by 2015 will have incorporated 25 new ships into its fleet, including 12 VLCCs.
In another notable deal that underscores Bangladeshi appetite for large tonnage, a floating production tanker was also reported sold for demolition in Chittagong.
The 1975-built, 24,000 ldt Modec Venture 1 , operated by Modec Ship Management, was reported sold for a lump sum of $8.2m, or the equivalent of $342 per ldt.
Bangladeshi yards were said to be back in full operation after a fortnight of strife following a court ruling that forced the government to impose strict requirements for vessels to be certified as toxics-free prior to beaching. Breakers held urgent talks with officials to find a practical way of tightening labour and safety standards while ensuring that business was not crippled.
A High Court judge was told last week that a new committee would take steps to improve conditions in Chittagong yards.
The court was set to issue a new ruling this week but, for now, yards appear to be back at work, with eight vessels beached.
However, the protests interrupted supply to rerolling mills and pushed up underlying steel prices, which could have a positive knock-on effect on demolition rates.
Rates for wet tonnage have pushed past the $400 per ldt mark across the Indian subcontinent, their highest level for many months.
In India, prices firmed as breakers swept back into the market after a quiet fortnight coinciding with the budget announcement.
Pick of the week went to the 1986-built, 7,790 ldt tanker Mont Ace , operated by Thome Ship Management. The vessel was reported sold to an Indian buyer for $410 per ldt, or nearly $3.2m.
Another tanker, Odfjell Management"s 1982-built, 9,344 ldt Bow Fighter , was reported sold for $570 per ldt [$5.3m], with 600 tonnes of stainless steel on board.
The 1975-built, 3,855 ldt general cargoship Radnor , operated by Tropis Shipping, was reported sold to Alang for $392 per ldt, or $1.5m, while the 1979-built, 9,842 ldt containership MSC Calcutt a was reported sold for $387 per ldt, or $3.8m.
An Indian buyer also reportedly paid $380 per ldt [$1.6m] for the 1977-built, 4,654 ldt bulk carrier Khaled Muhieddine.
In the last two market deals of the week, the general cargoships Micro (1978-built, 4,583 ldt, operated by Phocean Ship Agency) and Kerem Hantal (1969-built, 2,705 ldt) were reported sold for $380 per ldt and $362 per ldt, fetching $1.7m and just under $1m respectively.
Pakistani breakers did not secure any vessels but Chinese breakers bought two units. The 1977-built, 3,685 ldt boxship Primorye Maru was reported sold to China for $326 per ldt, or $1.2m, while Tarpon Shipping"s 1978-built, 5,653 ldt general cargoship Tarpon Santiago was reported sold for $360 per ldt, or $2m.