Ship Scrapping Market Sees Big Bookings
Several large LDT sales have taken place this week, as owners dip in to take advantage of the red hot sub-continent markets of the moment.
Almost all of the locations saw some activity this week (market and private), with India even getting in on the act (despite being the lowest placed sub-continent market) with one high-priced stainless-steel tanker purchase registering for the week.
With abysmal rates persisting across the sector, VLCCs and FSUs seem to be the types of units mostly in the firing line at present, whilst dry bulk and containers continue to soar. FSUs in particular are extremely difficult vessels to deal with for recycling, due to the massive amounts of sludge remaining on board and a sub-continent hot works standards being far more stringent these days to allow entry with all cargo holds, slops tanks and cargo lines required to be totally free of all cargo residues, slops and sludges and flushed clean to avoid any accidents during the recycling phase.
Therefore, FSUs become a position on the forward market as cleaning/removal of usually over 1,000 tons if sludges can take over three weeks and no end buyer is willing to work/wait on a vessel with a two-month forward delivery timeframe, especially as markets remain overheated at present and with every chance of cooling off as we approach the monsoon/summer months.
On the other end, the Turkish market went through a tumultuous time as the Lira and steel fundamentals, both declined over the last week.
Overall, we are witnessing the highest-priced rates seen across the sub-continent for a number of years, with several sales taking place above USD 500/LT LDT on decent spec units. Notwithstanding, whether this lasts for a period of time remains to be seen, with the volatility we have regularly witnessed this year, always likely to strike.
For week 13 of 2021, GMS demo rankings / pricing for the week are as below.
| Demo Rank | Location | Sentiment | Dry Bulk USD/LDT | Tankers USD/LDT | Containers USD/LDT |
|---|---|---|---|---|---|
| 1 | Bangladesh | Improving | 470/LDT | 480/LDT | 490/LDT |
| 2 | Pakistan | Improving | 469/LDT | 470/LDT | 480/LDT |
| 3 | India | Improving | 450/LDT | 460/LDT | 470/LDT |
| 4 | Turkey | Steady | 250/LDT | 255/LDT | 260/LDT |
Bangladesh: Piling up
Bangladesh continues as the highest priced sub-continent market for another week, with some stunning offers and purchases leading to some aggressive cash buyer acquisitions this week.
Firming local steel plate prices that jumped nearly USD 30/ton to almost breach the USD 600/ton mark, certainly had its share of influence on the current pricing sentiment on viable units.
One VLCC was sold into Chittagong at some top numbers, in addition to one FSU (the Darin Star, 40,970 LDT from Nathalin) that was committed for a decent USD 455/LT LDT basis an ‘as is’ Linggi, Malaysia delivery, with an expected of over 1,000 tons of sludges onboard as per all sister ships and recent FSU sales.
However, buyers are starting to become more cautious, with the monsoon season now approaching and tonnage starting to pile up on local yards with each passing tide, bringing in multiple arrivals by the week.
And this week was no exception, with over 150,000 tons of fresh tonnage that has arrived Chattogram anchorage, this week alone.
India: Back competitive
Indian buyers were able to force their way back into the picture this week, with one high-priced stainless-steel tanker purchase at some truly exceptional numbers.
The chemical tanker Laris (5,626 LDT) was confirmed to one bullish local Buyer at USD 850/LT LDT, with about 1,100 tons of solid stainless steel 316L on board responsible for the incredible price on show.
Steel prices continue their volatile dance over the course of each passing week whilst the Indian Rupee continues to trade into the mid Rs. 72s against the U.S. dollar, leaving India well-positioned and competitive going into the second quarter of the year.
Pakistan: Going higher
Having missed one or two large LDT vessels in recent weeks, Pakistani buyers have started to become frustrated and offer some truly impressive numbers, some even exceeding those from Bangladesh.
However, Gadani buyers have ended up empty handed for another week and may have to improve their numbers even further, in order to secure the desperately desired units.
For now however, it seems that geographically positioned units will be heading to Bangladesh, unless Pakistan can jump ahead of the pack to try and acquire
Turkey: Tripping
The Turkish market, like the performance of the subcontinent markets, has been unexpectedly volatile of late. Local steel plate prices declined by another USD 20/ton this week, whilst the Lira plummeted over 10%, well past the TRY 8.0 mark against the U.S. dollar.
Most local yards remain stuffed with tonnage and local recyclers are primarily concentrating on fresh units beyond an end April/early May delivery, whilst they work to clear the backlog of tonnage currently occupying local yards, especially the local EUSRR approved yards that have been the center of most Turkish recycling activity of late.
Just where this market will head to now, seems rather set, with levels still unchanged and fundamentals dithering around the same region.
(Source: GMS)
