Local steel plate prices in both India and Bangladesh registered further gains whilst local fundamentals remained steady in Pakistan, as Gadani Buyers continued to claw away at any available dry units, GMS said in its weekly report.
The recent sale of the Capesize bulker ‘Enterprise’ for $495 per ldt was the biggest recycling news over the last year or so. This sale caught a lot of industry players off guard, including end buyers from Pakistan, where the vessel will likely end up. However, it does appear to be an extremely risky forward position taken by the cash buyer concerned, GMS said.
The same buyer seemed intent on driving up the market in order to justify some of the risky positions taken and continued to take, illustrated by the sale of another large ldt FSU (ex VLCC) last week, making it already the third large ldt wet unit sale of 2018.
Many more are set to be introduced to the recycling market in the weeks/months ahead, as the tanker sector continues to struggle.
However, despite the firm prices, it was a surprisingly quieter week in terms of activity on the sales board, probably because several shipowners were actively pursuing a price close to or even in excess of $500 per ldt – a number which does not exist from a realistic viewpoint, given today’s market fundamentals.
GMS urged owners to recognise that the market is already trading at phenomenal levels (at three year highs) and has gained over $100 per ldt of late. As such, a few declines are to be expected at some point in the near future, as most end buyers are operating above their breakeven costs once again.
Brokers continued to report several tanker sales, including the 2000-built Panamax ‘Rise’ and the 1999-built ‘lion II’ thought taken by Indian interests.
Indian breakers were also thought ot have secured the 1999-built Aframax ‘Kareela Spirit’ and the 1996-vintage Panamax ‘Taimea’
As mentioned above, an ex VLCC was sold. This was the 1999-built FSU ‘Northern Star’ taken by Bangladeshi interests for about $408 per ldt on the basis of ‘as is’ Singapore.
Bangladesh breakers were also said to have taken the 1994-built MR ‘Bankim Chandra Chatterjee’ for an undisclosed price.