Markets - Recycling - Sub-continent to start buying again

Jan 11 2019

After a slightly sluggish festive period, in terms of sentiment and pricing and as the industry heads into the New Year, there was growing optimism for a return to form in the sub-continent ship recycling markets.

Bangladeshi elections finally concluded on the 30th December and as expected, it was a resounding victory for the ruling party with no change to the regime reported. It is hoped that as a result, this will quell some of the ongoing political unrest and uncertainty that have pervaded the country of late, GMS said in its weekly report.


Starved of tonnage, Pakistan may also come back into the picture, as its currency seems to have finally settled and high-rise building projects resume this year, leading to an increased demand for steel products.


Having missed out on many of their favoured container units of late, India too will likely return to buying, as local recyclers shift their focus towards and remain keen to import many of the green and offshore units on offer.


China has closed as a viable destination for international tonnage from the start of this year and only one or two of the open yards have the necessary licenses and the ability to import Chinese flagged vessels, albeit at rock bottom prices that remain in the low $100s per LDT. Even emerging Southeast Asian yards are paying more at present, GMS said.


The Turkish market remained lost, as local fundamentals further displayed volatility last week and local buyers refrained from any aggressive moves whilst local levels continued to drift.


Finally, the EU ship recycling regulations are now in force, which states that EU flagged ships can only go to EU approved facilities, almost all of which are in Europe with only two yards approved in Turkey.


Moreover, 13 yards in India have also applied for approval; however, this is expected to be a slow moving process and the timeline for Indian approvals remains foggy at best, GMS concluded.


Recent transactions reported included the sale of the 1999-built Aframax ‘Bunga Kelana 4’ to Bangladesh interests for $464 per ldt and the 1996-built Handysize tanker ‘Tessalina’ on private terms. 


In the newbuilding sector, Central was rumoured to have ordered up to four MRs at Hyundai Mipo.


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May 2019

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