Yet another capesize scrap sale has been reported to boost dry bulk demolition dry figures, which have been soaring amid the coronavirus-induced freight rate crisis.
Analysts, however, see signs of fatigue in the industry with prices falling.
The latest sale concerns the 172,500-dwt Ganbei (built 2001), which went to Bangladeshi buyers for about $390 per ldt, according to market sources in Athens. The price is said to include 400 tons of bunkers.
This is a good deal for Moundreas, which is now earning an estimated $8.4m for a vessel it bought nearly three years ago for between $9m and $9.5m.
Bulker demolition numbers have been going through the roof as freight rates collapse. Scrapping of such ships rose by 129% year-on-year in terms of tonnage to 2.4 million dwt, according to Clarksons figures as of 14 February.
Capesizes account for the vast majority of that activity. About 2 million dwt were scrapped, up 146% year-on-year. Seasure figures suggest capesize demolition sales are even higher.
The London-based brokerage says 14 such units have been sold so far this year, up from five in the same period of 2019.
By comparison, just about 500,000 dwt of tankers and 300,000 dwt of containerships have been scrapped since the beginning of 2020.
The prices at which bulkers are scrapped, however, have been falling.
Earlier this month, Maritime Enterprises Management, a Greek company believed to be controlled by John Frangos, sold the 170,800-dwt capesize Hope I (built 2000) “as is” in Singapore at $398 per ldt. The vessel had been circulating for sale as early as in September last year.
“The market caught its breath,” Clarksons said in its latest weekly report. “With sentiment wavering and scrap price levels unexpectedly falling further, buyers’ confidence started to decline,” the London-based brokerage added.
Bulkers will continue being sold but owners will likely have to accept the new price level, which can be between $20 and $30 per ldt lower than what was earned in recent weeks, Clarksons analysts reported.
It is unclear whether the trend for falling prices was also confirmed in the case of Andreas Hadjiyiannis-led Cyprus Sea Lines. Clients of the company have reportedly sold the 171,800-dwt capesize Victory (built 1996) for scrap at an undisclosed price.
Vessel trackers show the ship already in Bangladesh under a new name, Victor.
With excess inventory building up in Bangladesh and recyclers “smartly grabbing tonnages at competitive prices”, according to cash buyer Best Oasis, opportunities are springing up in India and Pakistan.
“Markets are actively enquiring for tonnages” in Pakistan, Best Oasis said in in its latest weekly report.
One Greek outfit that seems to have taken advantage of such opportunities was little-known Sigma Shipmanagement. According to broker reports, the company sold its sole bulker for scrap this week, the 30,800-dwt Pantanassa (built 1996) at $384 per ldt.
