Prices have come down from their mid-year highs by as much as $70-80 per ldt, due largely to the flood of inexpensive Chinese steel billets in the market that have taken huge bites into the profitability of the ship recycling industry.
Although a number of deals have been sealed in all the three major Indian sub-continental shipbreaking destinations, players have been struck by just how much speculation there is on decent sized units with forward deliveries going into next year.
Even as some desperate cash buyers tried to curtail their inventories, end buyers on the surface seemed keen to stock their yards at the present lower rates, but were finding it hard to rid themselves of the feeling that prices could drop further.
“The focus for many buyers still remains on getting those high priced vessels delivered to attentive end buyers,” said Dubai-based cash buyers GMS. “The smallest of discrepancies continues to be used as a reason to renegotiate prices; hence, it is more important than ever for owners to choose their cash buying counterparty wisely.
“At present, the last thing an owner wants is to be chasing down the market, yet some still feel that further falls could be imminent, with end buyers unable to sell the inventories on their plots due to the prevalence of Chinese billets, which continue to undercut them.”
Market bidding remained weak, with India leading the fray with offers of $425 per ldt for general cargo vessels and $455 per ldt for tankers. Pakistan remained ultra-cautious, with bids $5 per ldt lower than those from Alang, for both dry and wet tonnage. Bangladeshi offers were a further $5 per ldt adrift in both sectors. Chinese prices were at least $200 per ldt lower in both categories.
Deal of the week was that of the 17,655 ldt container vessel Cap Roca, which was sold to Indian buyers for an impressive $490 per ldt, for January delivery. The recent stability of the Indian rupee against the US currency, at a level of INR61 per dollar, emboldened the Alang players to make such a strong bid.
Pakistan secured the Cyprus Maritime controlled 9,161 ldt Panamax bulk carrier Princess Natalie for $465 per ldt, with forward delivery for January, and with 200 tonnes of bunkers on board. The high price strengthened the feeling that the ship could be headed for a re-sale.
Two small general cargo units from Far Eastern owners were headed for Chittagong yards – the 1,936 ldt Bright Future, sold for a bargain $400 per ldt, and the 3,663 ldt Freedom ,committed on ‘as is Shanghai’ basis for $380 per ldt, with 300 tonnes of bunkers on board.
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