Ship recycling rates crash through $500 per ton for favoured unitsShip recycling rates crash through $500 per ton for favoured units

In its weekly update, GMS described the market as “red hot”, with some of the highest rates being paid across the subcontinent for some years.

With the tanker sector still suffering a slump, VLCCs featured prominently amongst recycling candidates while, in contrast, older bulk carriers and container ships continue in service to cash in on buoyant trading conditions in those sectors, the world’s largest cash buyer of end-of-life ships said.

The company highlighted the challenges associated with the recycling of floating storage units (FSUs). Typically, more than 1,000 tonnes of sludge have to be removed from the cargo spaces, lines and slop tanks of an FSU prior to commencement of the recycling process. Cleaning can take more than three weeks.

Therefore, FSUs become a position on the forward market, GMS said, and no end buyer is willing to work or wait on a vessel with a two-month forward delivery timeframe, especially as markets remain overheated at present. There is every chance that they will ease off as the summer months and the monsoon season approach.

Bangladesh prices were still leading the field with typical rates of $490 for container ships, $480 for tankers, and $470 for bulk carriers. Prices in Pakistan were about ten dollars less across the board, with those in India down by a further ten dollars. Typical prices in Turkey, meanwhile, were $260, $255 and $250 respectively, GS said.

Related:Recycling activity likely to rise as older vessels face the chop