The three VLCC sales from last week, which included Dr. Peters VLCC the DS VADA (42,972 LDT), Eastern Pacific’s MARITIME JEWEL (41,732 LDT) and the Tsakos controlled MILLENNIUM (41,827 LDT), all of which were the last of the leviathans that managed to capture peak market levels of 2018 thus far. This week however, working (wet) units have all seen offerings anywhere between USD 10 – USD 15/LDT lower.
As a result, most Owners have been reluctant to negotiate / conclude their vessels at these sudden and unexpectedly lower levels, such has been the ferocity and extent of the (speculative) market improvements / offerings over this past month or so, where a number of VLCC Owners have seen recycling prices border on further trading levels as most Cash Buyers speculatively negotiated units with the anticipation of a Pakistani reopening.
Notwithstanding, even if prices were to settle USD 15 – USD 20/LDT (if this is where prices eventually settle) below recent peaks, it certainly cannot be construed as much of a decline as levels are still some at of the highest we have seen over the last few years.
Overall, demand has (expectedly) started to dampen given that all of those units concluded basis a Pakistan reopening, gradually are and expected to end up in Bangladeshi hands as Indian recyclers remain reluctant to match Bangladeshi levels for large LDT tankers.
Accordingly, on the back of a plethora of recent (market and private) resales into Bangladesh and Chittagong Recyclers becoming acutely aware of further units coming their way, we anticipate this is expected to play into their hands in the weeks ahead and help them grab a comparatively cheap deal (or two).
Source: steel guru. 28 March 2018