Bulk carrier demolition rates across south Asia are set to fall below the $500 per ldt barrier this week.
Buying inquiry from breakers on the Indian subcontinent is slowing down, which will not be good news for shipowners hoping to capitalise on high prices for their old vessels.
The onset of the wet monsoon season that saw recycling yards in India, Bangladesh and Pakistan buy up large volumes of tonnage over the last two months, and subsequently pushed up prices, is creating a reversal in the market now as the rain moves in.
“Prices continue to soften from the Indian subcontinent as downward pressure mounts on all markets. The local steel plate price has also dropped further which adds to the list of negatives the recycling market currently faces,” Gibson said in its weekly report.
“Whilst demolition rates still keep their head above the $500 per ldt mark, there are continuing signs that dry tonnage price levels may dip below this psychological barrier and if this continues we may see more bad news.
“With the added problems of budgets to be announced from the Indian subcontinent breaking nations and the dreaded woe of monsoon season fast approaching, it could be a difficult time ahead for the industry.”
London-headquartered rival Clarksons reported that cash buyers were having difficulties obtaining interest from breakers on the Indian subcontinent, as many appear to be satisfied with vessels already purchased in the last month.
“Certainly, this week has seen price levels weaken by some $10-$15 per ldt. Should this current trend continue in the coming weeks and into the monsoon season, then we may see Chinese breakers return to take strategically placed units away from the buyers who have been acquiring ‘as is’ in the Far East and ballasting back to the subcontinent,” Clarksons reported.