GMS Market Commentary on Ship Breaking in Week 12
World's leading cash buyer of ships for recycling GMS said that “Several large LDT sales have taken place this week, as Owners dip in to take advantage of
World's leading cash buyer of ships for recycling GMS said that “Several large LDT sales have taken place this week, as Owners dip in to take advantage of the red hot sub-continent markets of the moment. Almost all of the locations saw some activity last week, with India even getting in on the act despite being the lowest placed sub-continent market with one high-priced stainless-steel tanker purchase registering for the week. With abysmal rates persisting across the sector, VLCCs and FSUs seem to be the types of units mostly in the firing line at present, whilst dry bulk and containers continue to soar. FSUs in particular are extremely difficult vessels to deal with for recycling, due to the massive amounts of sludge remaining on board and a sub-continent hot works standards being far more stringent these days to allow entry with all cargo holds, slops tanks and cargo lines required to be totally free of all cargo residues, slops and sludges and flushed clean to avoid any accidents during the recycling phase. Therefore, FSUs become a position on the forward market as cleaning / removal of usually over 1,000 Tons if sludges can take over 3 weeks and no End Buyer is willing to work / wait on a vessel with a 2 month forward delivery time frame, especially as markets remain overheated at present and with every chance of cooling off as we approach the monsoon / summer months.”
On the other end, the Turkish market went through a tumultuous time as the Lira and steel fundamentals, both declined over the last week.
Overall, we are witnessing the highest-priced rates seen across the sub-continent for a number of years, with several sales taking place above USD 500/LT LDT on decent spec units. Notwithstanding, whether this lasts for a period of time remains to be seen, with the volatility we have regularly witnessed this year, always likely to strike.