Recycling Yards Confront A Lack Of Tonnage

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  • The latest update from GMS, the world’s largest buyer of end-of-life ships, suggests that yards are in a downbeat mood with virtually no ships up for grabs.
  • Owners with no option but to recycle older ships, GMS said, because they may face another special survey, a ballast water system installation, and the prospect of new IMO carbon efficiency regulations next January, should adjust their price ideas.
  • Prices have fallen to the $500s, GMS said, down from the heady days well over $700.

A recent news article published in the Seatrade Maritime News states that froth comes off demo market as owners keep old ships.

GMS’ interesting take

As a cash buyer, GMS has an interesting take on today’s recycling backdrop. “As vessels of 20 (and even 25) years of age continue to trade and make money, there seems even less reason for cash buyers to panic as there is certainly the opportunity to do a quick run (or two) on these ageing units, just to ensure that they break even on the deal,” the firm said in its most recent update.

Turkish recyclers are the hardest hit in today’s market, with steel plate prices continuing to fall sharply.

Typical prices in Aliaga are at $260 per light displacement ton for container ships, $250 for tankers, and $240 for bulk carriers.

Bangladesh leads the way

On the Indian subcontinent, Bangladesh leads the way, with typical prices of $620 for container ships, $610 for tankers, and $600 for bulkers.

Representative Indian prices are $10 lower across the three ship types, with Pakistan a further $20 lower.

However, sentiment is ‘weak’, GMS said, across all three locations.

Meanwhile, the onset of the monsoon season is unlikely to reverse the recent downward price trend.

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Source: Sea Trade Maritime

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