A capesize bulk carrier has been reported sold for demolition in India, which this past week has seen a slight upturn in its scrap prices in spite of the weakening rupee.
South Korea’s Chang Myung Shipping sold the capesize C Royal (151,000 dwt, 17,992 ldt, built 1996) to Indian buyers in Alang for $326/ldt or $5.87m in total.
Buyers in Pakistan had offered $323/ldt for the Japan-built bulker, which is the 70th capesize to be torched since the year began.
“The ship had finished discharge in Mundra in mid-August and with surveys overdue, she had no other option but to head straight for recycling,” cash buyer GMS said in its weekly market report this week.
Scrap prices in India have jumped by between $10 to $15/ldt on last week’s levels. India is currently paying around $290/ldt for general cargo vessels and $320/ldt for tankers, the report said.
“It is the local steel plate prices that have managed to prop up the market and restore some confidence in end-users once again, with significant ground gained again this week (up by almost $15/ldt) to even out some of the losses sustained in July, as a result of the dumping of cheap Chinese billets,” GMS said.
The advancing prices are remarkable in light of India’s rapidly depreciating rupee, which has been impacted by the 2% devaluation of China’s yuan last week.
Over the past week, the rupee has weakened by around 2.4%, closing at R67.03 to the dollar on August 24. The currency has seen slightly stronger performance today, and is currently trading at around R66.28.
GMS says the difficult economic conditions in India have forced many end buyers of scrap to file for bankruptcy and has caused many shipbreaking yards to close. Others have been unable to obtain financing to import fresh tonnage.
Meanwhile in Bangladesh, the cartel formed by members of the Bangladesh Ship Breakers Association (BSBA) that aims to control prices on available tonnage into Chittagong seems to be doing the country’s shipbreaking industry more harm than good.
Prices in the country have shown around a $10/ldt on last week’s level, but at $260/ldt for general cargo and $290/ldt for tankers, Bangladesh is still way behind its competitors on the Indian sub-continent. End buyers are reportedly resorting to desperate tactics to negotiate vessels for Bangladeshi beaches.
“Some of the ongoing ploys used by end buyers to renegotiate on agreed deals has become quite frankly absurd (especially in Bangladesh), with vessel conditions and minor cosmetic differences in appearance being used over these past few months, as ‘excuses’ to exploit cash buyers and owners alike, in order to bring prices down to prevailing levels,” GMS commented.
“The BSBA certainly needs to do a far stronger job in keeping its members in check and to ensure that Chittagong re-emerges as a viable ship-recycling destination once again.”