Capesizes still headed for scrap despite market rebound:

In what could only be described as a more than positive omen for the future prospects of the dry bulk market, dry bulk carriers and more notably Capesizes are still being sold to scrapyards, even if the number of vessels offered has declined over the past few weeks. According to the world’s leading cash buyer, GMS, a total of 13 Capes have been sold for scrap so far in 2017, as buyers are willing to pay more money, thus making it an easier decision for some ship owners, in the midst of a rebounding dry bulk market.

In its latest weekly report, GMS noted that “the heat that has been emanating from the recycling markets in recent weeks showed few signs of abating this week, with several increasingly impressive sales being concluded to cash buyers who are turning over-bullish in their offerings. Another capesize bulker was committed this week (taking the total number sold so far this year to 13) whilst several container sales also took place at some top numbers. Just how much longer this heat will sustain itself, is a point of concern to all cash buyers (who are concluding units at numbers that are turning crazier by the week) as well as end buyers, given that the monsoon season is on the horizon, supply has been fairly consistent and local steel plate prices (and currencies to an extent) remain volatile as ever. For the time being, all markets can bask in this renewed optimism and any resistance to these levels can be banished, as most end buyers dip back in to acquire tonnage, despite lingering concerns of aggressive pricing”, said GMS. It added that demand and capacity remains healthy across all locations. As such, it would not be surprising to see a sustained optimism in the buying for the remainder of the month, before monsoon considerations start to become concerns for subsequent deliveries.

In a separate note this week, shipbroker Clarkson Platou Hellas said that “the strength being noted lately in steel prices across all locations have plaid a crucial role in keeping the ship recycling market fairly buoyant. Prices have managed to hold their relatively high position for now, being driven by further appetite that’s emerging from the Indian Sub-Continent and in particular from India whose ship breakers have resurfaced in the market with a willingness to compete hard on the few demo candidates that are in circulation. The positive sentiment from the side of breakers has played its role, however the market has received considerable support for these prevailing prices by the fact that the number of vessels being offered have been considerably fewer then what we were seeing in past years during the same time period. There has been a considerable amount of containerships being sold, however will other segments have been seeing limited activity up to now and with some segments such as dry bulkers seeing a considerable recovery in rates, the number of vessels offered to scrappers has declined as a consequence”, said the shipbroker.

Source: hellenic shipping news. 09 March 2017

http://www.hellenicshippingnews.com/capesizes-still-headed-for-scrap-despite-market-rebound/