Week Ending: 27th July 2012 (Week 30, Report No: 29/12)
In the demolition market, the potential closure of Indian ship recycling industry and the drop in steel prices keeps the scrap price momentum at low levels with some signs of recovery, while currency in India is again loosing ground against dollar.
Offered prices are now around at $370-$380/ldt for dry/general and $400/ldt wet cargo in the Indian subcontinent region, while China offers levels below $350/ldt for dry/general and about $350/ldt for wet cargo.
India keeps winning some demo sales for its scrap yards given the uncertainty of the pending Supreme Court ruling in the coming days for banning vessels entering Alang unless any hazardous or toxic wastes had been removed. The court is due to rule on Monday whether the 214,000dwt M/V “ORIENTAL NICETY” (ex-Exxon Valdex) built 1986 would be allowed for disposal in Alang. There are hopes that the Indian shiprecycling industry will remain open and will not face long term closures as Bangladesh with potential stricter regulations imposed.
The week ended with 19 vessels reported to have been headed to the scrap yards of total deadweight 739,621 tons.
In terms of the reported number of transactions, the demolition activity is down by 10% from previous week’s business with 70% lower dry bulk carrier disposals, while In terms of total deadweight sent for scrap, there has been a decline of 49%, while tankers are holding the lion share, 32% of the total demolition transactions.
India is on the frontline by winning 9 of the 17 total demolition transactions. In terms of scrap price levels, notable demo deals in the wet and container markets for vessels disposals at levels $422/ldt including bunkers.
At a similar week in 2011, demolition activity was 37% lower than today’s levels, in terms of the reported number of transactions, when 12 vessels had been reported for scrap of total deadweight 557,302 tons with bulk carriers 66% of the total number of vessels sent for disposal. Scrap prices were floating at stronger levels with India offering $525/ldt for dry and $550/ldt for wet cargo, while Bangladesh market was inactive.
Source: GDSA (www.goldendestiny.com). 27 July 2012http://hiweb.blob.core.windows.net/hellenicshippingnewsbody/pdf/Seasure/wk%2030.pdf