Seatrade Global reported that it is becoming more and more difficult to predict the manner in which shipbreaking markets will behave. At a time when caution could have been expected to be the watchword, there was rampant buying at rates that can only be considered unsustainable.
In India, uncertainty over the direction of the general elections, a steady slide in prices of steel plate, to the extent of USD 10 to USD 15 per ldt during the month of April and the imminent start of the monsoon season were factors that should have adversely affected buying, but did not.
In Pakistan and Bangladesh, there would have been worry over the possibility of unfavourable policies being introduced in the national budgets, scheduled to be announced in the first week of June.
Ship recyclers were razor keen to stock their yards with pre budget vessels, particularly after the market was abuzz with news that a number of VLCCs were being earmarked for the ship cemeteries.
Pakistani operators tried putting their hands into this segment but with their counterparts from Chittagong with deeper pockets being vigilant in keeping their fingers on the market pulse, the Gadani breakers had to be content with a slew of aframax tankers they have successfully negotiated in recent weeks.
Dubai based cash buyers GMS said that the overall pre budget, elections and monsoon buying ramped into overdrive, particularly in India, as some truly speculative and bullish prices beset the market. There were even whispers of one or two VLCCs being concluded on ‘as is Singapore’ basis at some big numbers approaching USD 20 million with bunkers for the onward voyage, although gas-free status at this moment remains unclear, so a Pakistan or Bangladesh delivery is uncertain.
Bullish Indian cash buyers were bidding as high as USD 480 per ldt for clean tankers and USD 450 per ldt for general cargo vessels, remaining at least USD 5 per ldt ahead of corresponding offers from Bangladesh, and a minimum of USD 10 per ldt ahead of Pakistan in both segments.
Singapore’s Pacific International Lines got rid of their 6,811 ldt container vessel Kota Wirawan for a mind-boggling USD 513 per ldt. Market men felt that the decent age, ownership and size of the ship had attracted many end buyers, and was responsible for the massive price.
The Polish controlled 1991-built, 13,575 ldt Danish panamax bulk carrier Armia Krajowa sold at an impressive USD 480 per ldt, with 280 tonnes of bunkers on board. Italian owners committed both their ro-ro sister ships (both 13,696 ldt) Jolly Verde and Jolly Rosso on ‘as is Jebel Ali’ basis, for a very firm USD 500 per ldt en bloc, with extra payment for bunkers.
Source: steel guru. 10 May 2014