Indian recyclers reap benefits of HK Convention compliance, highlights a Sea Trade Maritime news source.
Firm freight markets
Firm freight markets are still restricting the flow of ships bound for subcontinent recycling yards, but Indian facilities that meet Hong Kong Convention requirements have been the yards of choice recently.
Shipowners’ increased commitment to responsible ship recycling has underpinned recent deals with Hong Kong Convention-compliant yards in India, following traditionally quieter recycling weeks during Ramadan and Eid celebrations.
The latest update from GMS, the world’s largest cash buyer of end-of-life ships, reveals that the 1985-built container ship, MSC Lucia, 8,911 per ldt, was committed in India for $530 per ldt and the 45,341dwt tanker, Maritime Lira, built in China in 1998, secured a price of $515 for her 12,235 ldt. This was based on a recycling resale restricted to ten yards only, and strict monitoring.
Recycling prices have dropped
Recycling prices have dropped significantly in Bangladesh where yards have been setting the pace in recent weeks. GMS estimates that the country’s yards are working on prices down by about $50/ldt compared with earlier this year. However, the firm’s analysis indicates that buyers in Bangladesh are still ahead on prices, typically paying $620 per ldt for container tonnage, $600 for tankers, and $580 for bulk carriers.
Pakistani yards are mostly absent, with Gadani recyclers remaining ‘miles from the action’, GMS said. There are still heavy restrictions on letters of credit owing to the country’s low dollar reserves, the currency is weak, and steel plate prices are flatlining, It is unlikely that any deals can or will be concluded into Gadani in the foreseeable future, GMS said.
Yards in Aliaga are facing weaker fundamentals too. Steel plate prices are down by about $10 a ton and the currency is softer against the dollar. Buyers are hoping to foster new deals by holding their prices for now but, in the absence of anything firm, a weaker market is almost inevitable.
Prices in India lag Bangladesh by $20-30 per ldt across the board, with nominal Pakistani prices a further $20-30 lower. Indicated prices in Turkey are $350 for container ships, $340 for tankers, and $330 for bulkers.
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Source: Sea Trade Maritime
