IAA PortNews is not the author of this article and the editorial opinion can differ from that of the author.

IAA PortNews is not the author of this article and the editorial opinion can differ from that of the author.

  • Источник: https://www.hellenicshippingnews.com

    2022 May 5

    Demolition market devoid of ships

    The ship recycling market is in a lull, not because of a lack of demand, but because of a lack of supply. In its latest weekly report, shipbroker Clarkson Platou Hellas commented that “with various holidays in effect, the market took on a much quieter role this week but there have been further signs of a weakening market from all the recycling destinations in the Indian Sub. Continent. As we arrive towards the end of Ramadan, and subsequently head into the Eid festivities, in addition to Golden week in the Far East, next week, we can expect a very quiet period.

    Increasing Covid-19 outbreaks in China is stalling their domestic steel demand recovery further during what is typically a peak period for steel consumption. The emergence of these cases comes at a time when there is still no end in sight for lockdowns in Shanghai, and now Beijing, to contain the spread of the coronavirus amid the country’s latest surge. The iron ore and steel prices continue to fall in China which is having a knock-on effect to the recycling destinations. The general view however is that price levels will rebound in a positive manner once the sub. Continent markets open after the holiday period. There are no sales to report this week”, the shipbroker said.

    In a separate report this week, Allied Shipbroking added that “despite the strong price on offer right in the ship recycling market, we have seen a real shortage in demolition candidates of late over the last few weeks due to the upward trend noted in freight rates across most sectors. As far as the Indian Sub-Continent goes, India’s domestic steel demand is constantly on the rise, resulting in local breakers offering highly competitive prices in their efforts to secure as much tonnage as they can.

    Initially, Pakistani breakers seemed to be following in hot pursuit, closing in on with what was on offer from India, though as it seems still lacking the support from their local market fundamentals to be able to clinch the top leaderboard position at this point.

    Bangladesh seems to be hold back at this point, trailing behind the rest of the main Indian Sub-Continent destinations, as the Ramadan festivities seem to have further staled the market at this point (in contrast to what we were seeing in Pakistan)”.

    GMS, the world’s leading cash buyer of ships added that “India finally leads the way on pricing this week, as all of markets i.e. Pakistani, Bangladeshi and even the Turkish markets work their way towards Eid holidays and the end of the Holy month of Ramadan.

    In fact, several markets are likely to be closed anywhere from a couple of days (as in the sub-continent) with the Turkish market celebrating until Thursday. Overall, it has been a far softer week in terms of sentiment in Pakistan, whilst Bangladesh has remained largely absent from the buying for another week. The Pakistani Rupee suffered some minor depreciations by about 2% or so, once again giving Gadani Recyclers another excuse to try and talk down the domestic market and even walk away from some high-priced deals that have reportedly failed to perform.

    As such, it is a market worth avoiding at present for this very reason. Bangladesh has also suffered some currency depreciations of their own leaving them even further away from the rest, subsequently ending the week as the most distant sub-continent recycling destination. Indian steel prices suffered some noteworthy falls during the initial course of the week, before recovering by the time the week ended, as Alang too enters the holiday period. Yet, Indian Buyers have managed to maintain pole position and continue to secure much of the dwindling array of available vessels. Finally, as Tanker, Container and even Bulker rates continue to impress as Monsoon lingers over the Indian sub-continent horizon, it is increasingly clear that the markets are going to see far fewer vessels for sale in the second quarter of the year”, GMS concluded.