Ship Recycling Prices (GMS Weekly)
While activity seemed as though it had been steadily increasing going into the final quarter of the year, the last couple of weeks have sent mixed signals as to whether the 4th quarter will actually be better for the ship recycling sector (as many have been anticipating).
Couple of weeks ago, we saw
currencies plummet in Pakistan and Bangladesh to the point, a wait-and-watch
attitude encompassed both markets – at least until the first sale to a local
Recycler establishes the new baseline for a type of unit in that market.
This week, it was local
steel plate prices across the sub-continent board that declined to varying
degrees, subsequently adding even more pressure on a potential ship-recycling
resurgence for Q4.
Mixed in with the fact that
there are still, very few candidates that have headed to sub-continent shores
over the previous two quarters and sub-continent markets have – as a result -
witnessed a gradual buildup of demand over this time, especially as plots and
port reports empty out to eerily quiet levels (especially in Pakistan, which
has not seen a fresh arrival at the waterfront for nearly 2 months now).
We have not seen recycling
markets as dormant for many a year, as all freight sectors push on and Ship
Owners are opting to continue trading, rather than getting rid of their older
assets.
As Dry Bulk and Container
rates continue to cool off, it may be that we see a few more vessels from these
sectors before the year is out. Tankers too have seen a remarkable turnaround
of late, with VLCCs finally seeing some positivity after years in the doldrums.
The main supply of tankers that we have seen come for recycling over the last
few years is therefore likely to dry up for the foreseeable future.
Prices remain stationed at
or just below the USD 600/LDT threshold, although there are still difficulties
in getting vessels sold / delivered into Pakistan (due to a constantly
depreciating currency) and in Bangladesh, due to tough government imposed L/C
restrictions that are still in place there for any large US$ value
transactions.
For week 38 of 2022, GMS demo rankings / pricing for the week are
as below.
Demo
Rank |
Location |
Sentiment |
Dry
Bulk USD
/ LDT |
Tankers USD
/ LDT |
Containers USD
/ LDT |
1 |
Bangladesh |
Weak |
570 / LDT* |
580 / LDT* |
590 / LDT* |
2 |
India |
Weak |
560 / LDT |
570 / LDT |
580 / LDT |
3 |
Pakistan |
Weak |
550 / LDT |
560 / LDT |
570 / LDT |
4 |
Turkey |
Weak |
240 / LDT |
250 / LDT |
260 / LDT |
For the full report go to GMS WEEKLY
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