Despite a lack of demolition candidates because of geopolitics and substantially higher rates in key shipping markets, recyclers are still holding off buying more tonnage.
Some cash buyers, it seems, have been caught out. They were expecting prices to strengthen as the supply of tonnage fell away. Some speculative purchases made with a rising market in prospect now look likely to result in significant losses, said GMS, the world’s largest cash buyer of end-of-life ships. Some cash buyers speculated on recycling candidates at levels above the current market, which is down typically by about $100/ldt on levels prevailing earlier in the year.
Demolition prices in Bangladesh, India and Pakistan are all around the mid-$300s for tankers, bulkers and container ships, GMS said. Recent sales to intermediaries include a VLCC and several other large vessels, all of which could lead to losses when the ships are finally off-loaded to recyclers. There has been some improvement in Turkish prices, however, where current levels in the low $200s are slowly rising.
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