Recycling prices steady

Feb 09 2018

Last week, the recycling markets appeared to have applied the necessary brakes, as there was no further weakening in sub-continent prices and sentiment, GMS reported.

This was despite some worries in the previous week given the volatility of local steel plate prices in India and Bangladesh and a halt to high rise construction projects in Pakistan on the back of an order from the Supreme Court.
In addition, the Indian budget was announced last week, without any real fanfare or even any pre-budget paranoia of post-budget price reductions that have historically affected local demand. 
On the contrary, there was no direct impact on the domestic ship recycling sector and as supply of meaningful tonnage dwindled for another week, demand for vessels appeared to be creeping up in India, as cash buyers scrambled to secure any available tonnage at continuing puzzling prices, GMS said.
On the sales front, news that another VLCC was reportedly committed at increasingly buoyant numbers emerged last week. If true, that would make it five units sold this year plus several others that still remain unsold in various cash buyer inventories. 
As such, it will certainly be interesting to see where each unit eventually ends up and whether the cash buyers are in fact speculating on the much talked about Pakistan re-opening for tankers.
Bearing in mind the recent loss-making Capesize bulker sale into Pakistan and the gulf in prices between decent lightweight tankers and dry units (almost $50 per ldt), it is surprising that even more pressure has not been placed on the PSBA and Pakistani authorities to finally permit the import of wet units into Gadani once more.
At this time, there are only a select few recyclers in Bangladesh who have the appetite and financial ability to open letters of credit large enough for a VLCC, as Indian buyers tended to prefer comparatively smaller lightweight vessels where they can import, quickly up and move onto the next ship, given India’s generally volatile local fundamentals - steel prices and currency. 
Last month, GMS held a training seminar in Bhavnagar that was conducted by its Green Team and the safety officers of Ganpatrai Jaigopal Ship Breakers (Plot No. 35). The training seminar was conducted in accordance with the guidelines implemented in GMS’s responsible ship recycling programme (GMS-RSRP). 
Following PHP family yard’s successful acquisition of the Statement of Compliance (SOC) in accordance with the Hong Kong Convention (HKC) – the first SOC ever granted to a ship recycling yard in Bangladesh, other yards have contacted GMS inquiring about the procedure to acquire their own SOC.
Two recycling yards were visited last month in Chittagong to advise about the company’s GMS-RSRP and the upgrading of their respective yards infrastructure to achieve the standards set out in the HKC.
Elsewhere, brokers reported that the 1990-built MR ‘Omega’ and the 1993-built Handysize ‘Ebra’ had been sold to Indian recyclers. 
No price level was disclosed. 

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