Two former SM Line containerships have eluded, at least for the time being, the recycling torch due to the fall in scrap prices.
Cash buyer GMS confirms it has sold the 1,620-teu Bangkok (built 1999, ex-SM Bangkok) to a Greek trading buyer.
The 1,641-teu Lila Hochiminh (built 1998, ex-SM Hochiminh) has been chartered out for around six months. It is due for special survey in April 2020.
GMS originally acquired the vessels for recycling in July for a reported $431 net per ldt, equivalent to about $445 gross, since when scrap prices have fallen sharply.
A spokesman for the cash buyer declined to reveal the identity of the company acquiring the Bangkok or the sale price. It is understood to be close to what GMS paid for the 21,184- dwt vessel - around $3m.
GMS was reported in July to have purchased the SM Line ships in an en bloc sale for slightly over $6m.
The spokesman said the decision to sell the 7,241-ldt Bangkok for further trading was a cost-saving exercise to shield GMS from a loss.
He noted that scrap prices have come off by around $50 to $60 per ldt from their earlier peaks due to a 2% depreciation in the Indian rupee, falling steel prices and new VAT taxes introduced in the Bangladesh budget.
“However, there is hope that as the fourth quarter progresses, prices may improve or return to some form of normality as all trading markets seem to be firm at present, meaning there is a shortage of ships for demolition sale,” said the spokesman.
The 21,528-dwt Lila Hochiminh (6,952-ldt) is said to have secured a charter at a level whereby GMS will not incur a loss. But the cash buyer declined to give figures or identify the charterer due to confidentiality clauses.
GMS says its alternative solutions for the two ships were in agreement with the former owner.
SM Line last month dismissed talk that it was quitting the liner business and was instead looking for the right partner and opportunity to expand its trade lanes.
