10 October 2011

GDSA Weekly Ship Demolition Market Analysis for WEEK 40 of 2011:

Week Ending: 7th October 2011 (Week 40, Report No: 40/11)

The week ended with the highest level of activity being recorded in the newbuilding market, firm secondhand ship purchasing activity and lower pace of demolition transactions The week closed with 41 transactions reported worldwide in the secondhand and demolition market, posting a 13.8% increase from a similar week in 2010 when 36 transactions had been reported and secondhand ship purchasing activity was 44.8% lower than the ordering business.

Demolition Market:

In the demolition market, the downward revision of scrap prices offered by India for dry cargo and the upcoming uncertainty for the extension of new deadline in Bangladesh market will be the two main factors that are going to influence the firm scrapping activity seen in September. Market sources suggest that some cash buyers are now trying to renegotiate highly priced deals achieved at levels lower than $500/ldt.

Bangladesh and India are now paying $500/ldt for dry/general cargo and $525/ldt for wet cargo.

Pakistan - seems to be more aggressive in new deals by grasping this week a tanker of 8,774ldt for $520/ldt asis Colombo, including bunkers.

China: In China, scrap prices have fallen by $10/ldt more with dry/general cargo units seeing levels of $430/ldt and wet $450/ldt, while cash buyers are finding difficulties in persuading sellers to position their units for disposal in their scrap yards. Market sources suggest that a bulker M/V “LUCKY OCEAN” of 22,225dwt with 5,437ldt committed last week at $450/ldt in China is again on the market for sale with end buyers willing to take the unit at prices now below $430/ldt.

Total delivered: The week ended with 10 vessels reported to have been headed to the scrap yards of total deadweight 301,395 tons with some deals concluded some time ago.

Week-on-week comparison: In terms of the reported number of transactions, the demolition activity has been marked with a 44.4% week-on-week decline, due to 78% weekly decline of scrapping business in the bulk carrier segment.
In terms of the total deadweight sent for scrap there has been a 72% decline.

Scrap rates: The highest scrap rate has been achieved this week in the tanker sector by India for a tanker of 68,159 dwt “LOUKA” with 16,248/ldt at $540/ldt, which implies stronger levels for wet tonnage in the Indian subcontinent region.

Market leader: India attracted 60% of the total demolition activity with Bangladesh trying to win some new deals before the end of its extension.

Similar week in 2010: demolition activity was down by 10% than the current levels, in terms of the reported number of transactions, 9 vessels had been reported for scrap of total deadweight 264,273 tons with three bulk carriers being scrapped and India offering the highest levels $435/ldt for dry and $465/ldt for wet cargo.

Source: Hellenic Shipping News (Sourced from www.gdsa.gr). 8 October 2011

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