GMS Market Commentary on Ship Breaking in Week 50 - Brakes On
World's leading cash buyer of ships for recycling GMS said that last week, as steel plate prices temporarily reversed in a previously rampant Bangladesh,
World's leading cash buyer of ships for recycling GMS said that last week, as steel plate prices temporarily reversed in a previously rampant Bangladesh, the decline finally put the brakes on what was a surging market. As a result, local expectations have been somewhat tempered there as the week ended. Perhaps, it has finally turned into a case of too much too soon, as prices increased by about USD 25-30 per LDT, light displacement tonnage, over the course of only a few weeks. As such, many End Buyers in Chittagong now seem to be content to wait and watch the market, rather than diving in at what may likely have been above market numbers from the previous few high-priced sales. On the other side, levels from India and Pakistan remain firm, yet, positioned just behind Bangladesh and there certainly seem to be vessels available for all markets, from HKC green to non-green units alike, as another busy year in the recycling markets reaches its crescendo. Finally, Turkey continues to be the impressive silent performer, with firming steel plate & import scrap prices that have both resulted in ship prices making a noteworthy jump this week, even though the TRY has weakened marginally.
Meanwhile, on the supply side, there have been a number of VLOCs sold at increasingly impressive prices of late, taking the total number committed so far this year to 28, in what has been one of the busiest sectors for recycling. Additionally, as charter rates slip to just around OPEX levels once again, we are seeing a number of Capesize Bulkers starting to return to the market for a recycling sale, some even built in the early 2000s. Therefore, it would be unsurprising to see additional large LDT vessels sold for recycling towards the end of the year, with tankers also firmly on the list of potentials, given the falling charter rates in that sector as well.