GDSA Weekly Ship Demolition Market Analysis for WEEK 42 of 2011:

Week Ending: 21st October 2011 (Week 42, Report No: 42/11)

The week ended with intense newbuilding business, fairly firm secondhand ship purchasing activity and scrapping momentum hovering at lower weekly transactions, while the highest activity has been recorded in the newbuilding market.

Overall, the secondhand ship purchasing activity is down by 58.3% in comparison with the ordering momentum, while the demolition activity is 77% down from the total number of orders reported and down by 46% from the secondhand ship purchasing activity.

The week closed with 23 transactions reported worldwide in the secondhand and demolition market, down by 52% from previous week and 25.8% from a similar week in 2010, when 31 transactions had been reported and secondhand ship purchasing activity was 20% lower than the ordering business.

Demolition Market

In the demolition market, the scrapping business has slowed down in the last month with demo countries offering levels below $500/ldt for dry/general and excess $500/ldt for wet cargo.

Bangladesh - The granting of official extension of ship-recycling industry is pending.

Pakistan - succeeded no deals this week, even though it has narrowed the price gap with the Indian subcontinent region.

China - scrap buyers won two demo deals after their return from National holidays by offering $430/ldt for dry and $450/ldt for wet cargo.

India - remains the key demo player.

In the wet market, scrap levels offered by Alang buyers are still very competitive for some units in excellent condition. 

Total delivered: The week ended with 8 vessels reported to have been headed to the scrap yards of total deadweight 249,561 tons.

Week-on-week comparison: In terms of the reported number of transactions, the demolition activity has been marked with a 43% week-on-week decline and regarding the total deadweight sent for scrap there has been a 71% decrease. The dropdown of scrapping business is due to a 20% and 60% lower momentum for bulk carrier and tankers disposals respectively.

Scrap rate: the highest scrap came to light this week in the tanker sector by India for a tanker of 16,420 dwt “CHINA SPIRIT” with 6,220/ldt at $580/ldt, the price is said to be based on saleable machinery and the country built of the vessel.

Market leader: India remains in the first rankings by attracting 50% of the total demolition activity.

At similar week in 2010: Demolition activity was up by 37.5% from the current levels, in terms of the reported number of transactions, 11 vessels had been reported for scrap of total deadweight 443,712 tons with scrapping activity in the bulk carrier and tanker segment being subdued, 5 scrapped units in total. India and Pakistan had been offering $410-420/ldt for dry and $440$450/ldt for wet cargo, while Bangladesh market had been inactive from the demolition scene.

Source: Hellenic Shipping News (Sourced from www.gdsa.gr). 21 October 2011

http://download.hellenicshippingnews.com/pdf/wk43.pdf