Allied Shipbroking added that “the ship recycling market is on an uninspiring trajectory for some time now, given both the stringer availability of demo candidates, as well as, the decreasing mode in terms of offered scrap price levels. In the separate demo destinations and more specifically that of Bangladesh, things continued moving on a strict bearish trajectory. The tighter availability of US$ in the country has resulted to tighter L/C levels, which means an inability to compete for the larger LDT units. In Pakistan, things are currently moving on a similar pattern as well.
The lack of vintage tonnage appears to be the main trend in the ship recycling market these days. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “as we have now entered the month of August, the holiday season is now in full swing with Owners, Brokers and Industry stakeholders taking some time away from the shipping markets. Meaning activity remains extremely limited, with only one or two Owners dipping their toes into the market, with what has been mainly older Tanker storage units such as FSU/FPSO’s. These have been reported proceeding to India as these Owners seek HKC compliant recycling and this will remain a wise move going forward for sellers as the Indian market remains the only stable market, despite the heavy Monsoon rains which naturally affect sentiment and productivity at this time of year. Its neighbours, Bangladesh, continue to struggle with opening Letters of Credit on units above USD 3.0 mill (amended from USD 5.0 mill last week) as the country’s central Bank remains starved of US dollars. Therefore, demand has completely fallen away and ultimately looks set to reduce prices further, but until we see a unit sold into the Chattogram recycling destination, it is very hard to determine where prices lie with little sales activity to report on”.