Scarce tonnage creates two-speed ship recycling market, says Wirana

A widening gap between ship recycling markets across the Indian subcontinent is showing that local yard appetite, financing conditions and available capacity are increasingly influencing vessel values independently of regional steel-price movements, according to Wirana Shipping.

In Bangladesh, the shortage of recycling candidates and strong demand from yards are encouraging recyclers to bid above the levels supported by local steel-market fundamentals. The number of facilities holding a Document of Authorisation to Conduct Ship Recycling (DASR) or Conditional DASR has risen to 39, increasing competition for the limited tonnage entering the market.

Only a small number of dry, wet and offshore vessels were offered during the past week. Despite this limited supply, a dry bulk vessel was concluded for delivery to Chittagong at higher price levels. Bangladesh’s local steel market reopened after the holidays with a subdued start, although steel plate prices increased by USD 2/MT and local scrap rose by USD 6/MT.

Conditions in Pakistan moved in the opposite direction. Weak domestic demand and the availability of imported ferrous material from Europe and Iran contributed to a USD 27/MT fall in local steel plate prices. Ship recyclers subsequently reduced their offers by approximately USD 15–20/MT, while interest in the limited dry bulk candidates being circulated remained weak.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →