No ships were reported as sold for recycling into South Asia from 13-17
July as the Ramadan holidays and falling steel prices in India removed all
appetite to purchase vessels.
Scrap prices of bulkers deteriorated to USD310-315/ldt, compared with
USD325-335/ldt from 6-10 July. Over the same period, scrap prices of tankers
declined to USD340-345/ldt, from USD355-365/ldt.
The Baltic Dry Index's plunge to a historic low in February
precipitated a rush by shipowners to scrap bulkers and forcing down prices. However,
the slowing Chinese economy that resulted in exports of cheap steel also
compounded the situation.
Indian cash buyer Star Matrix commented, "Finally the recession in
shipping has spread its shadow on the demolition industry, the only segment
which is responsible to take excess tonnage out of water to eventually bring
cargo-tonnage equilibrium is now facing financial crisis and demand
crunch."
In India, steel prices have fallen by about USD20/tonne from 13-17
July, compared with the previous week.
The situation is such that ship breakers have been making losses on
acquired tonnage and some of them are facing bankruptcy.
Dubai-based cash buyer Global Marketing Systems (GMS) said,
"Notwithstanding the improvement, local sentiment remains in tatters, with
over 50% of the yards now out of action - either facing foreclosure from the
banks or voluntarily removing themselves from the buying whilst markets remain
in such a perilous state."
However, GMS said there could be hope for the industry as some Chinese
steel mills might shut due to the slowing economy.
Source: ihs maritime 360. 21 July 2015
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