Ship boat

Lack of tonnage still plagues the ship recycling market

The ship recycling market started in 2022, where it left 2021, ie in a constant “hunger” for more tonnage. In its latest weekly report, shipping broker Clarkson Platou Hellas noted that “As we move into the new year, market activity has continued to grow slowly compared to last year. However, we understand that smaller units are starting to hit the market, so we will soon start to know the true value of the vessels when those sales materialize. Tonnage supply is expected to remain slow for the time being with no expectation of container units entering the fray and a limited supply of bulk carriers. The availability of tanker units could also be limited in the short term, but it could potentially be a busy year for recycling old tankers ”.

Source: Clarkson Platou (Hellas) ltée

According to the shipping broker, “all recycling destinations in the Indian submarine. The continent wants to acquire tonnage with an appetite to buy, and this hunger could increase if the current shortage of tonnage continues until January. Turkey also opened the new year with aplomb and the feeling is that this sentiment will increase until 2022. Sadly, reports of an explosion aboard an oil tanker that was being dismantled in a Chattogram recycling yards emanated from Bangladesh during the holiday season. Reports suggest that the accident occurred aboard the 310,000 dwt “Jubilant”, tragically with some fatalities and injuries. The Bangladesh Shipbreakers & Recyclers Association is said to be issuing an ultimatum to cash buyers following several serious fires and an explosion on tankers that had been poorly cleaned of gas and oil residues before the grounding. Other reports suggest the Association will send a written warning to cash buyers reselling ships at Chattogram recycling facilities, warning them that they will be officially banned from doing business in the country if they are caught in the process. to deliver ships that have not been properly cleaned and made completely gas-free, ”concluded Clarkson Platou Hellas.

Meanwhile, in a separate weekly report, GMS, the world’s largest cash buyer of ships, said that “2022 begins with Omicron sweeping the world, as global markets are increasingly under pressure and in a state of stasis (with this last wave). Plus, recyclers are still unsure whether to continue or step back further from the declines seen over the past month. The offer remains stifled, but there is a growing sense that the recyclers are not showing their real hand and, as such, are likely lowball offers in the hopes of getting a good deal or two (especially in Chattogram ). While on the one hand, Bangladeshi steel sheet prices have started to recover and have even remained stable for a few weeks now, on the other hand, the currency is stabilizing in Pakistan and Turkey (to some extent) and Now that the festivities and the holiday period are over, demand seems to be gradually strengthening in the markets of the subcontinent.

Source: GMS, Inc.

Stability even prevailed in Turkey this week, with no noticeable steel movement reported, while the lira found a second week of stability in the mid to high TRY 13s. In addition, since the marginal degree of supply of vessels is still unchanged, demand continues to persist in this market. As such, most recyclers at all levels remain keen to refill their plots, even though there is not enough tonnage in circulation and it seems unlikely that it will be a busy 2022 year (per compared to last year), with containers and dry bulk still in the air and a feeling that the besieged tanker industry could change at some point this year as well. It may also depend largely on the severity of this recent Omicron wave and whether the increase in the number of cases is starting to restrict trade and movement – as we are currently seeing in parts of the world. ‘Asia where “as is” takeovers are threatened, international travel restrictions appear imminent. , and infection rates are skyrocketing once again. In line with the weak optimism at the start of the year and while the fundamentals remain generally positive, most of the players in the sector are impatiently awaiting another take-off (very soon) ”, concluded GMS.
Nikos Roussanoglou, Hellenic Shipping News Worldwide