The shipbreaking market in South Asia continued its downward spiral last week as bulker prices fell below $400/ldt in Bangladesh and Pakistan.
While there is an ongoing influx of cheap billets from China, Dubai-based cash buyer Global Marketing Systems said a mild strengthening of the rupee against the US dollar, as well as Pakistan's decision to tax imports of Chinese billets could provide support.
Prices for dry vessels are now seeing below $400/ldt and there was talk of one or two units from existing cash buyer inventories being committed at such lower levels into Bangladesh.
"Favoured units will obtain a premium whilst older dry vessels in poor condition will receive much lower levels (now below $400/ldt) and provided there is any interest at all," said GMS.
In India, two bulkers with spare propellers and bunkers fetched higher prices last week.
Malah Maritime Services' 1994-built Handysize bulker ABM Leader fetched $3,431,432 or a decent $425/ldt and Sea Lion Shipmanagement-operated 1986-built Panamax bulker The Benefactor was committed for $4,105,530 or $435/ldt.
The collapse in oil prices and the corresponding drop in bunker prices mean ships can no longer demand high premiums for leftover bunkers upon arriving at the cash buyer.
On the other hand, shipowners have been refraining from selling older vessels due to the slide in scrap prices. Brokers told IHS Maritime that if this persists, cash buyers and scrap yard owners would have to raise their offers to get tonnage.
Source: 12 January 2015