Market sentiment in the ships demolition segment remains a big unknown, as the lack of tonnage is coupled with a general apathy from the side of cash buyers as well. In its latest weekly report, shipbroker Clarkson Platou Hellas wondered “what is happening to the market? There still appears so much uncertainty around that we are all left in limbo as to which direction we are heading. Despite the lack of tonnage, reports suggest that there is surprisingly a general apathy from the actual ship recyclers making it very hard to judge market sentiment. Asking cash buyers for an indicative price in today’s market for a particular vessel is intriguing at this current time. Without any real transparency and confidence, the price differential between varied cash buyers could be a USD 20/ldt gap. Thus, only when several sales are reported do we ascertain the true value of a unit and market sentiment. These are interesting times for the recycling industry as we turn the final corner towards the end of the year. We certainly had expected to see more supply than is currently being witnessed, however with the dry freight rates now seeing a negative change in rates, maybe a shift of Owners mentality towards the recycling market may be seen”, said the shipbroker.
According to Allied Shipbroking, “this week has emphatically confirmed the bearish mode that even the recycling market is under, with the recent activity showing signs of weakening. The appetite amongst the main demolition destinations is starting to falter as the market struggles to rebalance itself. Currently Pakistani and Bangladeshi buyers are the only ones active at the moment, whether this is due to a lack of berths/slots for beaching vessels or due to a price gap between India and the other main demo countries remains to be seen. As things stand now, prices are holding steady, however they are substantially lower from the prices we had been seeing a few weeks back. With this being said, its difficult to gauge where exactly the market is at the moment, due to a lack of diversity in tonnage being sent to the breakers. All-in-all we expect sooner or late the scene in the market to shift and we should see a healthier and more stable volume of activity take place once more, but there is still a fair road ahead to undertake before confidence will return to the market and a positive outlook restored”.
In a separate note, shipbroker Intermodal said that “following the small uptick of the week prior, prices in the Indian subcontinent demolition market seem to be enjoying stability during the past days, with a healthy number of sales concluded as well, while the Chinese market still constitutes the only negative exception across the board, with the gap between the two regions widening further last week. The fact that the fall in Chinese scrap steel prices has so far failed to plague demo prices elsewhere is certainly a positive development, although as we have stressed before this is certainly creating insecurity in the market that has been trying to find a stable footing since the end of the summer season. At the same time,, a new fire onboard the ex-“Federal I” in Pakistan has significantly lowered expectations that the existing ban for tankers in the country could be lifted before the end of the year and has in result taken significant pressure off cash buyers in both Pakistan and Bangladesh who have been witnessing a very strong momentum in the tonnage hungry Pakistan. Average prices this week for tankers were at around $240-410/ldt and dry bulk units received about $230-390/ldt”, Intermodal said.
Source: Hellenic Shipping News.