The Pakistani rupee has continued to fall, hitting a record low last week. With steel plate prices down by about $27 per tonne, Gadani buyers were biding time and no sales were reported. According to a market report from GMS, the world’s largest cash buyer of end-of-life ships, current uncertainties were forcing potential buyers to adopt a watch-and-wait approach, fearful of committing any sort of price on available units, particularly large ones.
Much the same story could be told elsewhere in subcontinent markets. No sales were reported in India, the currency came under renewed pressure, and steel plate prices fell by $18 per tonne over the week. Steel plate fell less in Bangladesh – down by about $5 – but Central Bank restrictions still in place on letters of credit leave buyers facing a stalemate. One sale was reported, according to GMS: the 7,987 ldt bulk carrier, Lumoso Karunia, built in 1990, fetched $592 per ldt on a Singapore ‘as is’ basis, for its§ Indonesian owner.
“We have not seen recycling markets as dormant for many a year,” GMS reported. “As all freight sectors push on and shipowners are opting to continue trading, rather than getting rid of older assets.” The company noted that a remarkable turnaround in tanker earnings is likely to mean few recycling candidates from that sector in the weeks ahead.
Nevertheless, prices remain at or just below the $600 per ldt threshold, GMS said, with Bangladesh nominally just ahead of India and Pakistan. Sentiment in all four locations, including Turkey, was described as weak. Price in Aliaga hovered around $250 per ldt although no sales were reported.
Looking further ahead, some analysts are predicting a wave of recycling activity as new IMO carbon regulations are just around the corner. However, others point out that man shipyard orderbooks are full for the moment and higher tonne-mile demand is underpinning earnings for the moment
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