London: Five more capesize bulk carriers were sold to demolition yards in Pakistan this past week, but prices there are soon set to sink as interest from end buyers is waning.
“The way prices seem to be moving suggests that subsequent sales (if indeed they can be delivered prior to the budget of May 30), all look set to go for below $400/lt ldt, even though the demand is there,” GMS, the world’s biggest cash buyer of steel, said in its weekly market report today.
This is the second consecutive week that Pakistani buyers have dominated vessel purchases, particularly of capes.
Brazilian miner Vale has reportedly sold its 18,176-ldt cape Ore Mutuca (149,500 dwt, built 1990) for $421/lt ldt ($7.65m in total), which GMS called “amazingly firm”. “Rumours abound that the deal may not go through as the MOA remains reportedly unsigned,” GMS added.
Greece’s NGM Energy sold the NGM Sailor (164,200 dwt, 24,051 ldt, built 1996) was sold for $418/lt ldt or $10.05m in total.
This is the second cape sold for demolition this month by the Moundreas-controlled company. In mid-April, the cape Matrix (149,400 dwt, 22,848 ldt, built 1996) was sold to Bangladesh for $420/lt ldt (including 350 tonnes of bunkers remaining onboard).
China-controlled Skaarup Management Hong Kong sold its 18,006-ldt Chikuzen 8 (150,800 dwt, built 1993) for $405/lt ldt ($7.29m total), which GMS called a “decent” price.
Meanwhile, scrap prices in India have shown some improvement, although the depreciating value of the rupee is causing some concern.
A week ago, the rupee was trading at a steady 62.88 to the dollar but has fallen over the course of the week to 63.68 today.
“This is of grave concern to end users who buy their units in US dollars and resell on the steel and equipment in Indian rupees, “ GMS said.
“A decline in local steel plate prices has also conspired to leave the industry on the verge of panic once again, particularly with some high-priced vessels, either unsold with cash buyers, or set to deliver over upcoming tides.”
Two bulk carriers are reported to have been sold for demolition in India this past week.
Germany’s Bertling sold its open-hatch handysize bulk carrier Toscana (36,100 dwt, 11,442 ldt, built 1997) to Indian interests for $407/lt ldt this past week ($4.66m total).
Greek owner Marine Spirit sold its 8,421-ldt handy bulker Ok 1 (33,600 dwt, built 1987) for GMS called an “impressive” $405/lt ldt ($3.41m total). Shipping databases list Ok 1 as Marine Spirit’s only vessel, signalling its exit from the business.