The number of ships sold for scrap has apparently slowed down a bit, during the course of the past week, as the market has paused a bit. Nevertheless, tankers are still the main candidates, as bulkers are enjoying a healthy rise in freight rates lately. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “after last week’s flurry of activity in terms of new tonnage and concluded sales, the market started to creep back to its old volatile ways as recyclers in India have reportedly lost confidence. This is basically from the previously reported troubles facing the Rupee as it made no gains against its previous losses and moved further into treacherous lower levels, resulting in sentiment to decrease from Cash Buyers and recyclers.”
“However, moving away from India, the sentiment and buying interest remains strong from Bangladesh and Pakistan, and this is where many of the recent Tanker sales will more likely end up. Also, there is certainly starting to be more activity from the Container sector, especially from the German market, as they are keeping a watchful eye on the developments in the recycling world. This is evidenced by the amount of Container sales and circulated tonnage seen, as it now looks to become the most prevalent sector in the recycling industry at present. We therefore see a certain amount of uncertainty in the market and we believe going forward, it will be dictated by how the currencies in the sub-continent behave themselves over the coming weeks”, Clarkson Platou Hellas concluded.
Accordingly, Allied Shipbroking said that it was “an active week in terms of ship recycling activity. The volume still holds despite the absence of activity reported for dry bulk tonnage. The tanker sector continues to be the main feeding source, while in terms of concluded activity, of interest was the sale of a 19-year-old VLCC which was sent to Indian breakers at a relatively competitive price (when compared to the price levels being heard of late). In addition to this, we also witnessed the retirement of 2 Aframax also being picked up by Indian breakers, though at slightly firmer levels. Meanwhile, a couple of containerships and a 25-year-old gas carrier were also amongst some of the most interesting deals concluded this past week. With regards to the trends being noted amongst the main shipbreaking regions, Indian breakers seem to have gained some market share of recent, despite the fact that the Indian rupee has slumping to historical lows and the slight decline noted in local steel plate prices. Bangladeshi breakers are still locked firm at the most enticing price levels being quoted right now, while Pakistan remain seems to be following closely though with minimal volume being seen as of yet”..
Meanwhile, in a separate report, GMS, the world’s leading cash buyer of ships said that “after weeks of positivity, some worrying reversals, both on local steel plate prices and currencies, wracked the subcontinent markets this week and may well preclude some (worrying) price declines in the near future. To start with, the Pakistani Rupee lost over 10% of its value in some dramatic setbacks that shook the Gadani market, whilst the Indian Rupee sunk to new lows in excess of Rs. 74 against the U.S. Dollar, leaving a rather grim outlook on subcontinent currencies against the USD. Countering some of the negative moves of the week were Pakistani steel plate prices, which declined overall but gained almost USD 20/LDT by the end of the week, imparting some sense of stability to a market that was otherwise reeling from the recent currency devaluation. Bangladesh on the other hand remains the one bright spot in the subcontinent, but the question begging to be answered is “for how much longer?” Having beached 5 VLCCs over the previous few tides, subsequently committing several more large LDT tankers and even more beachings this week, availability of both yard space and capable local Buyers able to open large Dollar value L/Cs are swiftly becoming increasingly hard to find. There has also been a noticeable influx of vessels over the past few weeks, particularly as the container sector starts to feel the heat, in addition to the steady flow of tankers that the markets have seen through a majority of 2018. As Diwali holidays approach in India, many will be hoping for some stability on the currency (having seen almost 40% of its overall value lost) and a strong end to the year after recent struggles. Finally, China continues to maintain its increasingly invisible stature in the ship recycling industry as Turkey’s overall status remains unchanged from last week”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
