With the future of the Bangladeshi market still unclear, it has been left to Pakistan and India to pick up the reigns in recent weeks, something that they have done with aplomb.
Some more high profile vessels and prices were on show once again in India as Pakistan continued their recent resurgence by picking up two more wet units to add to their collection of recent weeks. It is clear that demand and sentiment has once again returned in Pakistan and with steel prices noticeably firm across the board, this is something that will be needed from India/Pakistan, especially if Bangladesh continues to struggle to beach vessels as it has done for the past 6 months.
With no fresh permissions being granted for incoming or waiting vessels, those involved in Chittagong were left with more questions than answers this week. There is certainly hope that further permissions will be granted, perhaps as early as the first tide of December for certain units, but clearly no full market opening is in place.
Indeed, it will be more of a slow and cautious approach for most buyers as 5 more yards are understood to have obtained permissions to beach, on top of the 17 yards that were recently already cleared. So, there remains optimism that more vessels on top of the 14 so far beached will receive clearances, but with the wav the market has been in Chittagong for the past six months, predictability is far from accurate
China ship breaking industry - WEEK 47:
With very few candidates upon which to bid, Chinese buyers were left clutching at thin air for another week of inactivity.
As India and Pakistan continue to pay the big money and vet more uncertainty surrounds the Bangladesh market, China has had to watch from the sidelines as the majority of the market tonnage has eluded them.
It may be a quieter end to the year than many had anticipated for Chinese buyers although smaller general cargo units have been quietly finding their way to local buyers (due to the logistics and expenses to bring them over to India) and it may take a cooling in competing markets before China is once again competitive on price.
India ship breaking industry - WEEK 47:
As Pakistan finally picked up their efforts to be a competitive force once again in the ship recycling arena, India was left with a challenge to take home most of the market units on offer.
Whilst Indian buyers will always be relatively safe in picking up dry units - general cargo, tweens, MPPs, reefers, bulkers and the likes, it is on the wet front that they have started to lose out more (as proved this week with two more market sales to Gadani buyers who need only apply for the gas free for man entry certificate for inward clearance).
Nevertheless, the most significant sale of recent weeks was revealed as Belgian owners sold their Yugoslavian built aframax tanker PROMISE (19,637 LDT) 'as is' Fujairah for an undisclosed figure. The country of build and size ensure she would have received a premium from local buyers, even for an 'as is' deal (she had originally been mooted for an 'as is' UK sale). Having been widely circulated since the summer, she appears to have gone relatively quietly to the cash buyer concerned and is due to arrive India shortly.
The other interesting deal for the week saw Greek owners sell the high spec bulker FEDON (9,425 LDT) for a level usually reserved for tankers at USD 470/LT LDT. The condition of the vessel along with size and country of build contributed to an abnormally high price that may leave one or two surprised (standard bulkers tend to receive USD 450/LT LDT in today's market).
Pakistan ship breaking industry - WEEK 47:
Another busy week for a newly rejuvenated Pakistan market saw a number of market sales register at very firm levels. Two chemical tankers, NIKI and CUSTOM went for levels that even appeared to outstrip those of their Indian counterparts at USD 477/LT LDT as is Fujairah and USD 462/LT LDT respectively.
Less sensitive than Indian buyers on country of build and stainless steel content, these were two impressive purchases and may reflect a renewed aggression in light of the tendency Indian buyers to absorb all tonnage heading their way.
Of course with Pakistan procedures only requiring the gas free for man entry certificate far more wet tonnage has found a home in Gadani of late with the type of levels on offer. It is clear that demand and sentiment especially for the large we units has returned and it is sure to be a busy period ahead for those buyers keen to end the year on a high.
Bangladesh ship breaking industry - WEEK 47:
No beachings for the last tide of November have left many with another uncertain feeling for the immediate future of the Bangladeshi market.
Despite the 14 or so vessels that have so far managed to beach in earlv November, there is no telling whether those will merelybe something of an exception or whether subsequent vessels are able to get the NOCs in place needed in order to beach. There is some hope that the required permissions will soon be forthcoming, but there can be no resting on laurels any more in Bangladesh.
Fresh NOCs have vet to be issued as the Director General of shipping has actually been out of the country so has not vet been able to grant any. It will therefore be an anxious few weeks ahead for concerned cash buyers with vessels waiting and vet more tonnage is arriving.
Source: Steel Guru (sourced from GMS Weekly); Tuesday, 30 Nov 2010
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