Hong Kong: Brokers in Hong Kong tell Seatrade 'it is only a matter of time' until scrapping rates storm the hitherto unthinkable barrier of US$500 per ton.
Amid exceptionally tight tonnage availability for breaking the Bangladeshis have emerged over the past three months as the nation willing to pay through the roof for ships set for recycling.
The Bangladeshis have set consecutive price records on an almost weekly basis of late with prices rising from $400 in September to as high as $475 reported last week.
Naturally ship scrapping has not been a popular option for shipowners since the drmatic freight rate surge seen since autumn 2003.
Up until a couple of years ago the historical average for ship recycling had been around $155 per ton.
Shipbreakers in India, Pakistan and China are struggling to make a livliehood while the limited vessels available for breaking head to Bangladesh. There is some hope for these breakers though. Next year sees a record amount of bulkers hit 25 years of age; the phase out of single hull tankers by 2010 will accelerate and the spectre of overtonnage could bring down freight rates to a potential bloodbath, which would make scrapping an attrative option once again in the great virtuous shipping cycle. [19/10/06]