Activity is starting to ramp up in the ship recycling market of late. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “it is not just the typical rainy British summer being experienced at present, but a large glut of wet units are finally finding their way into the market as Owners reap the benefits of these impressive numbers still on offer from the recyclers. These have ranged from smaller chemical units with high value Stainless Steel content and larger tanker units, as evidenced with the sales below. As stated previously, the flow of tonnage and market activity is slowly but surely creeping back, nowhere near the active years of 2018, but a glimmer of hope for industry players to hold onto. There is an upbeat feel from cash buyers who seem more eager than ever to acquire units with sentiment across the board continuing to remain strong. There have been a few murmurings of a negative price correction this week following the iron ore price hitting a three-month low, but the hope is that it is just a minor blip with some stability returning, and despite this, market tonnage are still receiving bids in excess of the USD 600/ldt level. It will take something drastic to happen for a large price correction as buying confidence looks set to stay for the foreseeable future”, Clarkson Platou Hellas concluded.

In a separate note this week, GMS (www.gmsinc.net), the world’s leading cash buyer of ships said that “we have seen the first signs of cooling in the Indian sub-continent markets this week, as steel plate prices declined by about USD 30/LDT in Bangladesh. Even the Turkish market showed signs of softening this week, as both import and Turkish local steel prices reported declines of their own, and early indications out of Turkey already seem slightly softer than the preceding weeks.

This has come as something of a surprise to many in the industry, especially since it was only recently announced that China would not be exporting steel until further notice – thereby ensuring domestic supplies do not lose their values with cheap billets undercutting their own inventories. The significance of this announcement from China is likely to prevent any significant declines in steel prices and may even lead to a stable-to-positive market movements, moving forward into Q4 – especially as the monsoons subside in the sub-continent.

The most recent ship recycling recession greeted us in 2015, when steel prices more than halved as a result of the Chinese market dumping cheap steel billets across global steel markets – leading to the introduction of anti-dumping laws across the Indian sub-continent and elsewhere. However, fluctuations in steel and vessel prices are a perennial reality in these respective markets, even though fundamentals do remain firm and there seems a small chance of an adjustment in the recycling markets (at least in the short term), especially as forward prices on steel remain bullish to stable. Several vessels – particularly in the beleaguered tanker sector – continue to work firm on a weekly basis, as shipowners look to cash in on some of these fantastic offerings above USD 600/LT LDT on select units”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide