16 August 2015

Vale scraps Capesize amid sluggish ship recycling market:

Brazilian miner Vale has sold one of its Capesize bulkers for demolition into Pakistan, lifting expectations in the gloomy market.

Scrap prices, especially those of bulkers, plummeted as the Baltic Dry Index's plunge to a historic low in February, resulting in a rush by owners to scrap unprofitable ships.

Vale's 1997-built Ore Alegria was sold for USD6.9 million or USD330/ldt.

Dubai-based cash buyer Global Marketing Systems (GMS) said, "This sale shows there are signs of life in the market for all the doom and gloom emanating from scrapyards."

Brokers told IHS Maritime that Ore Alegria was initially offered into Bangladesh for demolition, but prices there remain unattractive as scrapyards have been hampered by heavy rain.

GMS added that scrapyards in South Asia have been refraining from buying ships as prices and demand fell in the wake of an influx of cheap steel imports from China. It is thus hoped that the reduced supply of ships would encourage sales once the South Asian monsoon season ends at the end of August.

On 6 August, scrap prices of bulkers averaged USD275-290/ldt and tankers averaged USD305-320/ldt.

GMS said, "Torrential rains have halted activity in India and Bangladesh over the past few weeks and upon the conclusion of the monsoon season a clearer picture on the health of the industry, sentiments, demand, and pricing could be forthcoming."

Source: ihs maritime 360. 11 August 2015

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