Demolition Activity Grounds to a Halt

Demolition Activity Grounds to a Halt | Hellenic Shipping News Worldwide

in Hellenic Shipping News 31/03/2020

Scrapyards are shutting down as a result of the spreading of COVID-19, bringing demolition activity to an inevitable halt. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “we are certainly experiencing challenging times, something never witnessed globally in peacetime, as the Covid-19 pandemic continues to hamper any sense of normality. For the first time in the Indian sub-continent, all three of the major recycling destinations have either closed fully (Pakistan), entered a 21 day lockdown period (India) or imposed a quarantine period for tonnage arriving for import clearance of 14 days (Bangladesh), basically following procedures for ports worldwide restricting operations and crew disembarkation/changes. This came in particularly swift fashion in Bangladesh which prevented all vessels being beached literally overnight (beginning of the week) – even those vessels that had arrived prior to this announcement suddenly had to shift to a quarantine area where they now remain for the 14 day period”.

Source: Clarkson Platou

The shipbroker added that “the Bangladesh authorities placed a tentative return to activities from the 7th April although some suggest this could well be extended, but with a backlog of tonnage waiting for clearance at Chattogram, it may be some time after this that any normal flow of beaching returns, as custom formalities and quarantine procedures will almost certainly delay the local process. After last week’s closure of all foreign vessels arriving into India and cancelling of all international flights and as aforementioned, India has further imposed restrictions on itself as the country has gone into complete lockdown for 21 days, with further restrictions on citizens being outside of their homes. Therefore, we do certainly do not expect any sort of activity from this destination, or Pakistan, for the foreseeable future.

Source: Clarksons Platou (Hellas)

This is an unprecedented situation for the industry and will have placed further particular strain on deliveries for Owners and Cash Buyers alike as they try to navigate themselves through these unknown waters. This is therefore significantly affecting sentiment locally as Banks remain closed and end recyclers struggle to manage their letter of credit lines (opening of Letters of Credit). This makes it very difficult for any accurate prices to be placed on new tonnage being marketed for sale and in fact, will see cash buyers refrain from offering all together or place low numbers on the table to grab a bargain from a desperate Sellers but again, delivery of any unit in this current climate is almost impossible”, Clarkson Platou Hellas concluded.

Meanwhile, in a separate report, GMS, the world’s leading cash buyer said that “all subcontinent recycling locations have gone into a complete lockdown this week, as the Coronavirus wreaks its devastating damage across the globe. In India, Prime Minister Modi has ordered the entire population of the country into a 3 week home-quarantine, in order to curb a national disaster on the scale of the Spanish flu that was witnessed over 100 years ago in 1918 and which claimed nearly as high as 50 million lives globally. All domestic and international flights out of India have also been suspended and non- essential industries such as ship recycling have been ordered to shut down, resulting in all ships that are due to enter Alang, being denied entry for the time being.
Shortly after the declarations of closure in Pakistan and India, Bangladesh has issued similar orders for a 14 day lockdown and almost all locations are likely to extend these emergency measures further, if no significant signs of tackling the virus are realized.

Source: GMS

Indeed, China took over 2 months of draconian measures to finally bring the disease under a modicum of control, with citizens in Wuhan finally being allowed out and public transportation finally getting up and running this week. Yet, international flights into China remain severely limited, with all visitors being required to undergo 14 days of mandatory quarantine upon arrival. Meanwhile, Europe and the U.S. of A continue to suffer with the most death tolls now emanating from Spain and Italy, as America gradually becomes the next hot-spot with the most confirmed COVID-19 cases on the planet now”, GMS concluded.

Nikos Roussanoglou, Hellenic Shipping News Worldwide