21 March 2012

GMS weekly report on CHINESE shipbreaking industry for WEEK 11 of 2012:

After a bumper last few weeks, there were some signs this week of a settling down in terms of price and aggression to buy. Just the two market sales were reported Sea Star ship management of China sold off their Panamax bulkers SEA STAR 7 (13,625 LDT) and SEA STAR 8 (12,111 LDT) for USD 435/LT LDT enbloc with 500 and 800 T bunkers on board respectively at time of delivery.

The fact is that even if vessels have significant bunkers on board upon delivery, the premium for the vovage over to the sub continent is currently only some LISD 25-30/LT LDT. Once owners' factor in delivery costs and waiting time, the potential profits are virtually negligible (especially if there are significant bunkers on board that end buyers in China can cash in on).

Some interesting news for the week concerned the opening of a new ship recycling facility in Dalian, North China a joint venture with Singaporean owners PIL by the end of the year. The yard should be able to take some 70-75 vessels per year and will be of particular interest to those owners with vessels open in South Korea / Japan due to the proximity from there for deliveries.

Source: Steel Guru (Sourced from GMS Weekly). 21 March 2012

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