Low prices disappoint ship recyclers

Prices are down by more than $100 per light displacement ton (ldt) since the highest levels seen earlier this year. The best sale was a container ship that was agreed at more than $600 a few months ago, but the latest commentary from GMS, the world’s largest cash buyer of end-of-life ships, reveals typical prices in the mid $400s.

Indian yards have been leading the fray, GMS said, with eight ships totalling almost 60,000 ldt either at the anchorage in Alang or delivered to their new owners last week. Several units were reported into India at prices closer to $450 but the 4,712 ldt general cargo ship, Boss 7, in good condition, closed at $473 and the smaller container ship, Sofia 3, with a tonnage of 3,782 ldt, was sold at $455 basis Khor Fakkan ‘as is’ delivery.

Pakistan would have been closer, GMS notes, but firmer prices in Alang won the day. Activity amongst Pakistani recyclers remains mooted as the country’s economic woes continue. GMS reports that the IMF’s upcoming loan tranche of $7 billion may have gone awry as the country has failed to meet some of the qualifying requirements. Recyclers have remained inactive there for a lengthy period now.  

A brighter picture prevails in Bangladesh where yards were also back in buying mode last week, with two sales reported. The 3,322 ldt container ship, Armada Sejati, sold at a reported price of $470 and the Fatma Sari, an 8,012 ldt bulker, fetched a firm $488. Her appeal included above-average condition of hull and ballast tanks, powerful generators, and four 25-tonne cranes.

India leads on price, according to indicative numbers from GMS, but these are declining across the board. Typical prices prevailing in Alang are $490 for containers, $480 for tankers, and $460 for bulk carriers. Bangladesh is ten dollars down, and Pakistan a further ten. No deals have been reported in Turkey for months.