Capesize bulkers witnessed
an extended lease of life during 2017, as the recovery of the dry bulk market
gave little incentive to their owners, to scrap them. The same can’t be said
for the tanker counterparts, with what looks to be yet another challenging year
in 2018, seemingly setting the scene towards more VLCC scrappings.
In its latest weekly report,
GMS, the world’s leading cash buyer of ships said that amid the holiday season,
activity in the ship demolition market settled down, as ship owners and brokers
took some time off, meaning that the next few weeks are bound to be
characterized by slow activity. In any case the quieter weeks are perhaps
rather welcomed, given what have been a frantic few weeks of recycling
activity, with much of the (recycling) focus falling on the wet and offshore
sectors of late.
“Moreover, even though the
markets recently witnessed a flurry of early-to-mid 90s built Capesize bulker
sales from the Korean market (ones that were coming off government charters and
being sold for scrap), it has been remarkably quiet on the dry (and container)
recycling fronts this year as freight rates in both these sectors have made
decent recoveries. The general feeling is that the pain being felt in the wet
and offshore sectors is set to last a little longer and even going into 2018,
an expectedly large volume of VLCCs (those on storage and otherwise) seem
destined to come under the torch. In fact, this year alone, the markets have
seen 14 VLCCs and about 25 Aframax tankers committed for scrap so far, most of
which have ended up in Bangladesh”, said GMS.
It added that “on the
industry front, given the large number of tankers sold for recycling this year
and a slowdown on the dry side as well, it has been an exceptionally
challenging (and frustrating) period for Gadani recyclers who have found
themselves regularly paying over the odds (often as the highest placed
sub-continent market), just to secure any of the working (dry) units that have
made it for sale thus far. In fact, for the past 3-4 months, there have been
whispers that the Pakistani market will open up for tankers again, albeit with
stricter gas free for hot works standards (similar to those India and
Bangladesh). However, discussions / meetings with the Pakistani government and
PSBA are still ongoing as to how soon local authorities will permit tankers into
the local market once again, after the tragic accident which cost scores of
lives earlier in the year”, GMS concluded.
In a separate note, Athenian
Shipbrokers added that “with the holiday season in full swing, last week saw
the demolition market quieten down in terms of activity. The Bangladeshi market
remained stagnated with no considerable alterations in terms of pricing and
fundamentals. In India however local buyers appeared to take advantage of the
betterment of local steel plate value and currency leading to a few
high-profile reported sales. In Pakistan the hard times continued as the
deterioration of local currency pressed the market even more. In the Far-East,
the year is expected to close with a negative sentiment, as the majority of yards
remain closed”, the shipbroker concluded.
Source:
hellenic
shipping news. 28 December 2017
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