With the ship recycling market in bear mode, active members of it are cautious of their next move. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “as all and sundry connected with the shipping industry descended on Greece for Posidonia, it was obvious that many are reaping the benefits of the incredible markets with food and wine in abundance at the various organised parties and functions. However, the main topic for those huddled in corners from the recycling industry was which direction the next movement in rates will go”.

According to the shipbroker, “many of the cash buyers and recyclers in attendance remain cautious for the time being, a decision perhaps being helped by the continuing lack of tonnage being made available. The currency volatility and fluctuating commodity markets are not providing any comfort for the time being, but if the scarcity of new tonnage continues for the early summer months, then the consensus is that price levels will have to rebound.

Patience may be the crucial word! Next week sees members from the recycling industry descend on Rotterdam for a conference which will, most likely, see no positive change from the European Union authorities in relation to ship recycling in the Indian sub. Continent. Let us hope that we are pleasantly surprised”, Clarkson Platou Hellas concluded.

In a separate note, GMS , the world’s leading cash buyer of ships added that “after the recent falls sustained across all sub-continent recycling markets, there does seem to be a new floor in the low USD 600s/LDT that has been reached, which seems to be the price point where Recyclers feel increasingly comfortable offering at. As expected, there have been instances of opportunistic offerings below the USD 600/LDT mark. However, very few sales (if any) have taken place in the high USD 500s/LDT, as there remain virtually no potential units to offer to Recyclers at these lower levels. If any new sales do take place in the weeks ahead, it is certainly clear that a USD 100/LDT fall has been fully materialized and optimistically, the way forward now seems up, especially as fundamentals, sentiments, and prices, all (finally) seem to be stabilizing as the sub-continent enters the summer / monsoon months. Notwithstanding, with industry titans attending Posidonia this week, no market sales / transactions were to be expected.

Budgets in Bangladesh and Pakistan were announced on June 9th & June 10th respectively, with no news (positive or otherwise) having been announced that would directly impact each destinations recycling sector. While at the onset, this may seem like inaction on part of the respective governments to limit the downward spiral, it may give an opportunity for the markets to recover on their own and find a new stable ground. At least, sub-continent steel plate prices have ceased their worrying downward spiral and with Chinese lockdown measures easing, it is hoped that the worst may well be over for the sub-continent recycling markets (for now). On the West End however, Turkey continues to plummet without remorse as levels here too have dropped nearly USD 150/MT, and despite some stability seemingly appearing in the sub-continent markets this week, things bode no better for Turkey, with a weakening currency and plummeting steel plate prices making matters worse”, GMS concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide.