Jhe shipbreaking market appears to be in disarray, with prices collapsing. In its latest weekly report, ship broker Clarkson Platou Hellas said “The recycling market has taken a disastrous turn for the worse this week due to a clear lack of confidence in the industry in Bangladesh. Price levels Bangladesh’s domestic market slumped this week as cheap imports from domestic factories took over cheap finished goods from China, contributing to a major correction in ship scrap. is now considerably less than importing ships for recycling and as a result local demand for ship scrap has receded, so the Bangladesh Ship Breaking Association has issued an ultimatum to shipyards to immediately put an end to the sale of their stocks to steel mills to eradicate the current negative sentiment/prices.Therefore, this market needs to be considered closed for the time being as local recyclers have stressed that they will not be offering any tonnage for the time being”.
The shipbroker added that “elsewhere Indian and Pakistani buyers have demand but here price levels have fallen lately and with monsoon rains now affecting the Indian subcontinent, all markets are expected to remain inactive for the next two months. at least. The general feeling is that there will be little demand or activity from all three destinations before the end of the monsoon season, when perhaps price levels should rebound. As we approach halfway through the year, recycling activity has been limited, with 201 reported 4.6 million GT units sold for recycling, down 27% year-over-year on an annualized basis” , concluded Clarkson Platou Hellas.
Meanwhile, in a separate note this week, GMS , the world’s largest cash buyer of ships, said “The deteriorating performance in the ship recycling industry over the past (and painful) months shows little sign of slowing down at this time, as it has been a real tale of misery, even though prices remain at some of the firmest levels we have seen in the last decade.Down from highs of $700/ton, lower levels of nearly $100/ LDT have left a bad taste on most mouths in the industry Admittedly, the last time prices broke from the psychological barrier of 700 USD/LDT was in 2008 when even 800 USD/LDT crashed. briefly overtaken during the unprecedented boom years of the shipping industry, before the global financial collapse in September of that year.. However, it has not been long since we have seen freight rates at such optimistic figures, c ar all sectors (dry bulk, tankers and containers) continue to fly, giving a healthy collection of these aging ladies an extended chance to live in their respective global trade. fleets.
As such, it remains a bit of a conundrum for the ship recycling industry, as applicants remain scarce and their inbound volume is not expected to increase anytime soon, even with prices having fallen by more than 100 USD/LDT. and having left feelings on the pitch. in pieces, levels above 600 USD/Tonne seem insufficient to tempt ships towards recycling shores. Steel prices have indeed recovered a little in Pakistan, while they are stabilizing to some extent in India, ending the week at levels similar to those of the beginning of the week. However, it is the currency that continues to plague recyclers globally, resulting in a general lack of confidence in the tonnage supply. Perhaps a period of inactivity could revive subcontinent markets and bring demand back, of course, once steel prices and currencies stabilize at an acceptable level. At the other end, Turkey is finally managing to pull out the nearly 6-plus-week endless slide that has seen levels fall around USD 250/MT, as import steel plate prices and local are registering their own improvements,” concluded GMS.
Nikos Roussanoglou, Hellenic Shipping News Worldwide