Aggressive Pakistani buyers are pushing demo rates into territory not seen for years.
The scrapping of the 151,102 dwt Silver Ocean bulker managed to net owner Sinokor Merchant Marine a price of $445 per ldt. There have also been a raft of other ships netting more than $400 per ldt. Polaris Shipping, the owner of a significant number of converted ore carriers, has taken the opportunity to send some of its oldest ships to breakers with brokers reporting the Stellar Unicorn has joined the Stellar Cosmo on the beaches of south Asia. The Stellar Unicorn was found to have a significant crack in its hull this April which forced it to undergo weeks of repairs off Cape Town.
Ship recycling experts think the $450 mark can be broken this week.
“At this point, both Chinese and Turkish buyers remain only as simple observers, unable to respond, with all eyes focused in the India Sub-Continent as the price gap widens further. Pakistani breakers have re-emerged with an aggressive appetite for tonnage, taking the lead in the market, offering very impressive numbers,” shipbroker Allied noted in its most recent weekly report.
Allied did question however whether the offered prices are representative of the market or are “highly speculative buying” which could eventually lead to a significant down- ward correction in due course.
“For the moment it seems to be supported by a boom in local steel prices, showing how local demand for steel continues to feed the demolition market,” Allied concluded.
Clarkson Research in its most recent weekly report stated that the general feeling is that more units are expected to follow.
“[C]ertain cash buyers are beginning to show some caution, perhaps believing that the market is becoming overly speculative,” Clarkson warned.