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Ships; Demolition Market Looking to Pick Up Next Week

Ships; Demolition Market Looking to Pick Up Next Week
It might have been rather quiet over the course of the past few weeks, but things could start to pick up in the demolition market over the course of the coming days say shipbrokers. In its latest weekly report

Clarkson Platou Hellas said that “genuine sales candidates that are being touted in the market this week are finally creating some positive momentum, pushing price levels northwards as the lack of tonnage, particularly for Pakistan, starts to bite. Owners of any larger LDT dry cargo tonnage will certainly benefit from the sudden bullish sentiment witnessed from Pakistan this week as these recyclers have been deprived of such tonnage for some time. With currencies and domestic steel markets remaining volatile, many predict that these improved rates will be temporary however the lack of definite sales candidates will certainly not whet the current appetite from the recyclers and therefore it is hoped that activity will pick up for the remainder of the year. Elsewhere, Bangladesh continues to be the only destination for tanker units whilst India remains the main buyers for Green recycling tonnage and smaller units. The Chinese market is in a lull at this current time as price levels now only hover around the USD 200.00 per ldt area”.
Meanwhile, according to GMS, the world’s leading cash buyer, “as we head into the final month of the year and the traditionally stronger festive / New Year period, this week, on the back of firming local steel plate prices and bullish sentiments, several unexpectedly high-priced sales were concluded as markets (particularly in India and Pakistan) started to shift upwards once again. A handful of container sales took place into India at previously unthinkable levels – something that will certainly offer encouragement to Ship Owners with tonnage to sell before the end of the year, particularly as freight rates in the dry sector have disappointed of late. Additionally, there continues to be a steady flow of tankers and offshore units with the former heading mostly to a somewhat subdued Bangladesh as Indian buyers have astutely picked up on the value that offshore units present. As reported last week, the fire that unfortunately erupted on the FSU Aces (ex Federal 1) once again means that we are unlikely to see any wet units heading to Pakistan before the end of the year – a real disappointment given that momentum for a reopening was building up until this recent mishap. In the meantime, local steel plate prices (especially in India) have gained over USD 10/LDT during the course of the week and enquiries have been emerging at increasingly impressive numbers – largely off the back of Moody’s upgrading India’s sovereign credit rating to stable. India is therefore the market to watch for the remainder of the year, as witnessed by the flurry of activity seen there this week and as local demand is much stronger given the recent minimal activity (except on green and offshore units) that resulted in a largely barren summer for Alang recyclers”, said GMS.

In a separate note, shipbroker Allied Shipbroking said that “an important step for recovery has been made this week in the recycling market, after a prolonged period of softening. With fresh interest seeming ample at the moment, the market is showing a completely different face after more than a month of limited activity. For a second week in a row, Pakistani and Bangladeshi buyers are the main drivers with ample appetite being seen after having handled the notable stockpiles they had achieved some weeks back. At the same time, a bargain hunting attitude towards the market is clearly apparent for the time being. The highlight of the week is the strong numbers in terms of scrap prices, indicating that there is a willingness to heavily compete on high specification candidates but take a more cautious attitude in general and avoid over speculation. All-in-all, the market has become ever more volatile lately, with no clear trend being seen for the time being and more being subject to the flow of demo candidates coming to market”.

In its own weekly report, shipbroker Intermodal said that “with the exception of China that remains the weakest link across the most popular demolition destinations, sentiment across the board has improved substantially over the past days, with all of the reported sales being done at levels well above $400/ldt. The appreciation of local steel prices in the Indian subcontinent region together with some recent container sales in India at around $440/ldt, have strengthened momentum and eventually have helped prices rebound substantially, with cash buyers in the region appearing particularly aggressive in their offerings during the past week. There is also traditionally a tendency for demo prices to firm before the end of each year and if this is what is in the cards for this year as well we could indeed see very impressive levels sooner rather than later. Additionally, even though rates in the Dry Bulk market have witnessed a slowdown recently, the number of demo candidates in the sectors remains comparatively low and that keeps supply of tonnage in check, which should also keep offering support to prices. Average prices this week for tankers were at around $235-415/ldt and dry bulk units received about $225-395/ldt”.

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