Market price

Pakistan, the price leader in the demolition market

Strendy owners looking to scrap their old ships are more likely to find a good deal in the Pakistani scrap market. In its latest weekly report, shipping broker Clarkson Platou Hellas said that “it has been a week highlighting how constantly changing and volatile this market is, ensuring that it is always difficult to know the true market value of a ship. This happened following a change in sentiment this week with some conservatism over rates that are back in effect. It has been reported that the domestic steel markets are quivering at the prices seen in the international market and the fears that remain in the submarine. The regions of the continent, in particular India, regarding the continued increase in Covid-19 cases and the management of the virus and most importantly, how they intend to face the coming winter. A certain hesitation has also invaded Bangladesh where local recyclers remain cautious at present, which is mainly attributed to the large Cape and VLOCs acquired earlier in the year and to the yards which still digest this large tonnage of LDT ”.

Source: Clarkson Platou

According to the shipping broker, “Pakistan continues to be the most desirable destination for ships, and the strongest in terms of price points, of the three markets on the subcontinent. would have led to a “dead end” between cash buyers with tonnage on hand and recyclers. We also want to point out that the large bulk carrier sales that were reported in some media and market reports last week seemed to have excited many without knowing the background to the deals being made and creating an artificial market. With the two capesize units reported sold there is an option to trade in these units further, it is understood that buyers will take them and secure them both on charter due to the strengthening of the freight markets. This also applies to the Panamax concluded in the sale which attaches to the two Cape bulk carriers as a package and therefore not a market price and just one to watch until it inevitably arrives at a recycling destination. With little supply of ships on the horizon however, prices have a chance of recovering from the slight decline seen this week and hovering around the mid-point of $ 300 as many cash buyers have very little on hand and this is helping to their frustration which could inevitably lead to some panic buying of some, ”concluded Clarkson Platou Hellas.

In a separate note, Allied Shipbroking added that “we are starting to notice the emergence of a divergent trend between the dry bulk and tanker industries in the ship recycling market. In the first case, improved sentiment and healthier freight earnings dampened the interest of vintage dry bulk owners. However, despite this, last week we saw a significant number of dry bulk units being scrapped. With respect to the latter, the interest-free performance of freight rates led owners of old tanker units to negative PnL accounts, prompting them to choose the opt-out option for some of the older units. Meanwhile, the recent improvement in bid prices has been a bullish factor that has already increased activity in the Indian subcontinent. Bangladesh, which led the market in the first half of the year, saw its market share shrink due to improving fundamentals in other destinations. However, this remains a solid option and we expect activity in the country to remain at reasonable levels. At the same time, India continued to be the first option for green recycling. Rising bid prices and stable fundamentals lately have increased optimism among local circuit breakers. Finally, Pakistan’s strong and unexpected return now seems to be only a temporary affair. The activity of local wreckers there remains robust and this is expected to continue through most of the last quarter of the year, ”the shipping broker noted.

Meanwhile, in a separate note, GMS, the world’s largest cash buyer of ships, said that “a whole series of sales have been made over the past week and in all markets, as the sites of recycling of the subcontinent are finally getting back into the fray after the prolonged absence and the drop in rates observed at the height of the Covid-19 crisis this year. After a first half dominated mainly by containers and PCTCs (for HKC’s green recycling), it appears from the sales chart this week that the number of tanks for recycling is also starting to increase. Prices have followed a dramatic bullish curve in recent weeks, recouping the nearly 150 USD / LDT from losses suffered in the second quarter of the year. However, against a backdrop of improving vessel supply, levels appear to have stabilized / stabilized in all markets on the subcontinent around the mid-300 USD / LDT for now. Even Turkish market levels improved slightly this week, as local offers surged despite the pound weakening to record lows against the US dollar, ”GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide