06 April 2013
It has been quite a week for the cashbuying industry for vessels coming towards India. We have seen bulkers with some bunkers and specials (spare propeller, non-ferrous) onboard obtain levels in excess of USD 440, at the same time some sales for standard bulkers have been recorded at USD 415 levels. There is no firm price indication with huge gaps between what breakers are willing to pay for such vessels.
Some cashbuyers seem to be on a mission to secure tonnage at extra ordinary levels, showing signs of a bubble being formed. Fact is, no shipbreaker has purchased any one of the ships yet that are securing such aggressive levels. If the shipbreakers don’t improve their prices over the next couple of weeks we may see a mighty fall in all these levels.
On the other hand cashbuyers are very bullish about the market with view of the beaching trend in the last few months. Months of Feb-Mar have beached only 48 vessels in total, with not many hitting the shore in India for the month of April either. This may suggest a demand for ships in Late April/May, but we also need to compute for is the amount of tonnage already on the breaking plots accumulated over the last one year.
It is a tug-of-war out there between the owners and the breakers with cashbuyers being stretched in the middle. There is no telling where the prices may head in the future, but last week actions show no signs of it being a stable market out there.
We should all keep our wits about ourselves and enjoy the ride.
We would like to further educate our readers that ship-breaking industry for East Coast India (Kolkatta) is still open and operating successfully. There is limit to the type and size of vessels allowed for breaking in the region. Feel free to contact us for further details on prices and restriction for this region.
Though there is continuous high uncertainty of the government and ruling party, Pakistan ship breaking is still quietly performing its business and not allowing the political governance to affect its business activities. Breakers here are also competing fairly with the Indian and Bangladeshi markets on bulkers and more over on tankers. Tanker currently can achieve USD 435 levels and are still dominant in the region.
Bangladesh too has seen substantial activity this week, with lot of breakers coming back to business seemingly with financial abilities to perform. Yet average time of delivery is still much more than that of India, with a very uncertain environment.
There are still quite a few vessels which have been waiting for a long period of time. New penalty laws by local custom authorities regarding vessels that are coming for discharge and then demolition are unclear and cause of lot of confusion within owners. Though sustaining good volume of business it is always important to remember the unpredictable and bureaucratic nature of the ship recycling industry in Chittagong.
No change in prices since last week. Turkey seems to be maintaining a healthy and stable market with breakers having enough choice of tonnage from the med as well as the black sea.Turkish owners are negotiating ships for delivery Alang / Bangladesh as their ships are positioned in Indian Ocean. Hence able to take advantage of higher subcontinent markets.
What a roller-coaster it has been for china from the beginning of this year. They seem to be going through the same cycles of peaks and troughs the subcontinent is popular for. The Chinese markets have gone extremely soft with almost all outstanding offers on ships being withdrawn.
The main reason being the fall in the local steel market. The Chinese have been on holiday most of the week and we should have a much better Idea of where the breakers stand coming Monday.
We can only hope the Chinese market doesn’t slide any further down. China and the subcontinent share a healthy volume of tonnages, but any further price fall in China will cause the ship owners to move towards the Indian subcontinent creating a whole new whirlpool of variables and price speculations for the cashbuyers and breakers alike.
BULKERS – 420 USD / L.T
CONTAINERS – 445 USD / L.T
TANKERS – 430 USD / L.T (CLEAN)
BULKERS – 410 USD / L.T
CONTAINERS – 420 USD / L.T
TANKERS – 420 USD / L.T
BULKERS – 410 USD / L.T
TANKERS – 430 USD / L.T
BULKERS – 350 USD / L.T
CONTAINERS – 350 USD / L.T
TANKERS – 360 USD / L.T