It is reported that rates to buy ships for demolition plunged to the lowest since June 2010 as a weakening Indian rupee, an oversupply of vessels and falling scrap steel prices curbed purchases.
According to the Baltic Exchange, a London based publisher of freight rates and vessel prices, cash buyers who purchase older ships from owners for resale to demolition yards on the Indian subcontinent are paying USD 383 per lightweight displacement tonne for dry cargo vessels. Lightweight displacement tonnes measure the weight of an empty ship and India, Bangladesh, Pakistan and China are the top four countries for scrap.
The price is the lowest since June 2010 and has declined 23% in a month, cutting larger vessels' demolition values by more than USD 1 million since May 2012, weekly assessments from the exchange show. Rates paid for oil tankers in India, Pakistan or Bangladesh are USD 410 per tonne as compared with USD 496 per tonne on April 30th 2012.
Source: Steel Guru. 22 June 2012http://www.steelguru.com/international_news/Ship_scrapping_rates_fell_to_lowest_since_June_2010/269877.html