Conditions are ripe for yet another wave of mass ship
demolition sales, with owners having to balance the pros and cons of their
decisions, regarding their older vessels. In its latest weekly report, ships
buyer GMS noted that “the big news this week concerned Panama’s ratification of
the Hong Kong Convention on the Safe and Environmentally Sound Recycling of
Ships (HKC). The fact that the flag controlling about 18% of the world’s fleet
has signed up (the fifth nation to do so) is certainly a major boost to those
in the industry and to those who have been championing the Hong Kong
Convention”.
GMS added that “some major yards in India have
already received class NK approval, with more under process (along with those
receiving RINA certification) as the importance and emphasis on green recycling
in the Indian sub-continent markets comes to the fore once again. Denmark has
also said it is signing up to the Hong Kong Convention next spring after
changes to its domestic laws, something that should send a strong message to
other European (and global) countries to ratify and thereby enter the convention
into force and embrace the core values of green ship recycling. This comes at a
time when the global shipping markets have been rocked by news of the Hanjin
bankruptcy and the container sector in particular has responded by even
scrapping a 10 year old vessel. The faster the HKC is ratified and entered into
force, the faster a global set of guidelines can be imposed for sub-continent
markets to comply with – something that will only help to raise ship-recycling
standards globally”, GMS concluded.
Meanwhile, in the demolition market, shipbroker
Allied Shipbroking noted that “with demo prices having risen considerably over
the past couple of weeks and appetite amongst cash buyers holding firm, it was
no surprise to see a sudden ramp up in activity this week. Prices for dry
bulkers having been touching on the 300 US$/ldt mark, a significant point for
sellers, as we have not seen any price levels above this mark since late 2015.
At the same time there has been a big inflow of vessels from other sectors such
as containerships, with many owners choosing a quick exit, as they have been
feeling the pain from the poorly performing freight markets for quite some
time. As such it didn’t take much in terms of improving scrap values to push
them over to the beaching option. It still feels as though these price levels
are not holding firm and much of this rise has been driven primarily by
speculative buying. For the time being however it seems to be holding”, said
Allied.
In yet another report, shipbroker Intermodal said that
“sentiment in the demolition market remained very much positive for yet another
week, with activity and prices continuing to firm, while the number of
container vessels that come up as demo candidates in the market is still
overwhelming. India has after a long time re-emerged as the top market player,
with appetite on behalf of local breakers being massively supported by a
firming India Rupee as well as scrap steel prices in the country that provide
the confidence needed at the moment to end buyer to commit to current price
levels. As far as the supply of vessels is concerned, we reiterate our opinion
that containers help activity remain strong in the following months as long as
the freight market does not improve and of course in the light of the ballast
water convention entering in force next year, while when it comes to demo
prices, recent weakness seen in Chinese steel prices could be signaling a
downward correction sooner rather than later. Average prices this week for wet
tonnage were at around 195-305 $/ldt and dry units received about 185-295
$/ldt.”, the shipbroker concluded.
Source: Hellenic shipping
news. 29 September 2016
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