Ageing bulk carriers and steam-turbine LNG carriers could provide a short-term boost to ship recycling supply after a prolonged shortage of demolition candidates, according to Singapore-based cash buyer Wirana Shipping.
More tankers, bulkers and LNG carriers were circulated for recycling over the past week, although overall supply is expected to remain slow to moderate over the next couple of weeks before improving.
Dry bulk and LNG tonnage are expected to drive the increase. Secondhand demand for bulk carriers is increasingly concentrated on modern, fuel-efficient ships, while appetite for older vessels is weakening ahead of tighter environmental compliance requirements. That could leave owners of ageing bulkers with fewer opportunities to sell them for further trading and make recycling a more attractive option.
Steam-turbine LNG carriers are also emerging as potential demolition candidates as demand weakens for vessels using the older and less-efficient propulsion technology.
Hitesh Vyas, Wirana Shipping vice president for the Middle East and green recycling coordinator, said strong freight and secondhand markets had previously allowed owners to keep older vessels trading, while buyers are increasingly favouring younger and more efficient ships.
Recyclers across the Indian subcontinent remain keen to secure tonnage. Indian steel plate prices have risen by $31 per metric tonne over the past five weeks. Indian recyclers were prepared to raise offers by an indicative $10 per long ton of light displacement, with scope for higher levels for attractive vessels. Pakistani recyclers were showing strong interest in dry bulk vessels and were prepared to bid above prevailing levels, while dry cargo ships and tankers attracted a positive response from buyers in Bangladesh during the past week.
Wirana Shipping Corporation is a Singapore-based company specialising in ships sold for recycling. It says it has more than 35 years of experience and has handled more than 2,700 vessels representing over 88m dwt. The company acts as an agent on behalf of its principals rather than owning or controlling the vessels it handles.