According to few of the shipbrokers, the demolition market hasn’t been up to the levels required since the start of the year, with ship owners reluctant to offer more tonnage for recycling.
Shipbroker Clarkson’s View
Lack of tonnage supply
The latest weekly report said that, there remains a distinct lack of tonnage supply whilst the Owners continue to reap the rewards of a positive freight markets and as such, it is increasingly difficult to try and give guidance for current price levels. One or two units have filtered through to the industry this week and reports suggest that, finally, some increased inquiry is emanating from the waterfront as buyers, perhaps, start to realise the harsh reality that the market looks set to be starved of tonnage for the considerable future.
Firm price for container vessel sale
This possibly explains the firm price witnessed this week for the container vessel sale reported below which seems to have engaged a cash buyer and with a later delivery, when the vessel is set to deliver.
Whilst the domestic steel markets throughout the Indian sub. Continent remain delicate, the lack of arrivals to the recycling shores at some stage should kickstart some buying interest, provided of course, demand for steel returns.
Allied Shipbroking’s View
Limited volume in recycling market
Similarly, Allied Shipbroking said this week that, once again, activity in the recycling market remained rather limited, despite the considerable boost on a w-o-w basis.
Given that we haven’t seen yet the volume that many anticipated earlier this summer, as we approach the final quarter of the year, it makes it sense that some sort of growing appetite amongst breakers should emerge.
Prices show gains
Apparent, though, is how the offered prices have started to show some gains in momentum reflecting the fact that a number of breakers have been seeking to be more active now. However, it is very early to say that during the final quarter we will see again transactions reported at levels of above US$ 400/MT mark.
For the time being, Bangladesh shows the most potential, with both India and Pakistan being left well behind both in terms of quoted levels and reported tonnage.
GMS leading cash buyer’s View
Stable subcontinent market
Meanwhile, in a separate note, GMS, the world’s leading cash buyer said this week that, as the fourth quarter gets into full swing, a degree of stability finally seems to be emerging in the subcontinent markets as a couple of sales have reportedly registered at firming numbers this week, leaving Cash Buyers and Recyclers cautiously optimistic.
Little hope to reach previous level
Many had been expecting some sort of return to form come September, but constant declines over the summer / monsoon months across all subcontinent locations (and even Turkey of late) has delayed this by at least a month or so. Given the drastic declines noted over the recent past, there is little hope that levels will return to previous highs in the mid USD 400s/LDT (and higher).
Makeup previous loses
However, if the markets improve just enough to make up some of the previous heavy losses of about USD 70/LDT, it would certainly be an appreciable start. Bangladesh has initiated the early running with the recent capture of a VLCC and several tankers, nearly grazing the USD 400/LDT mark once again and this in turn may stimulate competing markets in both Pakistan and India (both desperately short on pricing and tonnage) to firm up and compete once again on any potential tonnage.
Collapsed steel plate price
Problems still persists, of course, with steel plate prices having collapsed spectacularly in India and cheap Chinese billets being offered into both Pakistan (from Iran) and Bangladesh (from China). Even Turkey has not been spared from the rotting decline affecting subcontinent recycling destinations with collapsing plate prices of their own that have fallen by about USD 50/Ton over the last few weeks.
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