As scrap prices
dwindle, five unnamed members of the Bangladesh Ship Breakers Association
(BSBA) have formed a pricing cartel to control prices on available tonnage into
Chittagong, which commentators say will result in fewer vessels heading to
Bangladesh for demolition in the near future.
The cartel hopes to
secure fairly priced ships for its buyers. Many shipbreaking yards in Bangladesh
have posted huge losses over the past year.
“It remains to be
seen just how long this cartel will last, bearing in mind some of the prices
quoted on certain units appear to be about $50/LDT behind what Indian and
Pakistani buyers are offering. Therefore, we expect most of the dwindling
supply of vessels to be diverted away from Bangladeshi shores in the
foreseeable future,” GMS, the world’s largest cash buyer of ships, commented
today in its weekly market report.
Only seven vessels
have been sold for demolition in Bangladesh over the past four weeks, compared
with 21 vessels in the preceding four-week period.
During the past
week, Bangladeshi buyers have been offering $250/ldt for general cargo vessels,
$30/ldt lower than India and $25/ldt less than in Pakistan.
For tankers,
Bangladesh has been offering $280/ldt, again $20/ldt to $30/ldt lower than its
competitors on the subcontinent.
“If end buyers are
keen to acquire new vessels, a review of the system may be required yet again,”
GMS said.
Source:
splash 247. 17 August 2015
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