Average demolition values in China and the Indian
subcontinent have come under
pressure recently, with
$/LDT values posting
a 7.3% decline
since mid-October. Although global steel prices have gained 4.8% since
January, prices have shed 13.9% since reaching a YTD high in March.
Given
the price discount
for steel reclaimed
via tanker demolitions
in locations with cheap
labor relative to
global steel prices,
demolition values have been
less impacted than
global steel prices;
average China and
Indian subcontinent $/LDT values have only lost 2.5% since March.
Several global steel production facilities are
reportedly idling production as the
European sovereign debt
crisis continues to
stoke uncertainty in
global markets. Accordingly, the
gap between global steel price indices and demolition values could narrow,
mitigating greater further $/ldt losses.
Despite
a more limited
pricing gap, even
minor $/ldt losses
may present fresh downside
risk for tanker
markets as the
recent progression to
newer, double hull tanker
demolition sales remain
one of several
key factors to alleviating overcapacity in the sector.
During
October, double hull
tonnage accounted for 78.1% of
the total
tanker
tonnage demolished –
up significantly from
an average of
18.0% during the first
3 quarters. Over the past two weeks, however, demolition
sales activity has
declined markedly, with
just one unit
reported as sold
to such buyers.
Reported Tanker Demolition Sales
-
WEEK 43:
“SEBAROK SPIRIT” 95,649/93 - 15,661 LDT
- Sold for $481/LDT basis as is, Singapore including 400
MT bunkers ROB. (Double Hull )
WEEK 44:
NO tanker demolition sales were reported for week 44.
Source: Hellenic Shipping News (Sourced from Charles R. Weber Weekly, www.crweber.com). 6 November 2011
No comments:
Post a Comment