Opinions differ over the consequences of market upheaval.
Opinions are split over the direction of demolition prices given the ongoing scrapping hiatus in
Bangladesh and ethnic tensions in . Pakistan
Anil Sharma of Global Marketing Systems (GMS) and Tahir Lakhani of Dubai Trading Agency put contrasting spins on what the market may expect.
Sharma sees a potential short term spike in prices to around $500 per ldt if the price of steel holds or strengthens and
reopens for business in the next few weeks. Bangladesh
“It will not last long but I can see it happening,” said Sharma of a possible uplift in prices, which have recently seen bulkers and tankers securing around $440 per ldt, although some have gone for much more.
Lakhani, however, says he doubts $500 per ldt can be achieved in the foreseeable future given examples of
paying as low as $425 per ldt. India
He questions market chatter of Bangladeshi breakers rushing to replenish stocks. It may be open initially for 10 or so ships but recyclers are unlikely to act like fools, he says.
Cash buyers attending a private luncheon to mark the launch of tradeWinds Ship Recycling Forum scheduled for 1-2 march 2011 in
From left, Ali Lakhani,
trading Agency, Steve Wansell, Mideast Shipping & Trading, Anil Sharma, Global marketing Systems (GmS), mujibur Dubai
Rahman milon, Silvia Shiptrade (S) Pte Ltd, Tahir Lakhani, Dubai Trading Agency, and Briac Beilvert, eckhardt marineUnconfirmed reports say the environmental authorities in
Lakhani says that until a ship is beached again in
, that market should be seen as closed Bangladesh
The market has also been knocked by scores of deaths due to the ethnic violence in
Lakhani points to reports of 350,000 tonnes of material lying at Gadani because buyers are not coming forward following the troubles and collections have halted.
GMS talks in its last report of activity in
drawing to a standstill, with most vessel buyers lying low and many uncontactable. Pakistan
Despite positive sentiment in
, the market earlier this week was said to be falling, despite the approaching Diwali holidays, prior to which prices normally rise. India
Money, it is claimed by one source, is being sucked out of Alang by big share issues in
that offer investors better returns. India
Meanwhile, some cash buyers are said to have been selling at a loss, including one vessel bought for $448 per ldt “as is” in
Fujairah but sold this week on a delivered basis at $440 per ldt. Examples involving other cash buyers have also surfaced.
“The market is very bad at the moment and I feel it will remain bad,” claimed one cash buyer. Others are less worried.
The extra cost is being borne, it is said, by either owners or cash buyers.
Meanwhile, Sharma says 2010 has turned out to be a much slower year for demolition than 2009 when, he says, around 1,000 vessels went to the torch. Last year saw a lot of containerships recycled, whereas this year it has been tankers.
The more muted supply in 2010, especially in the dry market, is because of charter rates remaining relatively firm, says Sharma.
Also, owners who bought older tonnage at high prices have been reluctant to sell.
Sharma believes some owners have held on to ships, especially tankers, in anticipation of
He estimates that this year between 700 and 800 vessels will be recycled.
Lakhani says the yearend total could be as low as 600 if
does not reopen. He puts 2009’s total at closer to 700 to 800 vessels. Bangladesh
Sharma and Lakhani joined various other cash buyers, brokers, lawyers and the International Maritime Organisation (IMO)’s Nikos Mikelis at a luncheon at
London’s Lanesborough Hotel to mark the launch of TradeWinds’s Ship Recycling Forum to be held in on 12 March 2011. Dubai
Source: Trade Winds. By Geoff Garfield. 29 October 2010