A pair of Petrobras product tankers acquired by cash buyer Best Oasis at auction more than a year ago are finally making their final voyages to Alang, with a third likely to follow later this year.
Their arrivals at the Indian ship-recycling centre will come at a time when Indian steel plate prices have fallen sharply in excess of $60 per ldt, which is expected to result in a quieter end to an otherwise remarkable year in which prices have more than doubled.
In its latest market report, Banchero Costa (Bancosta) described the sudden drop in steel plate prices as having "rocked" the Indian recycling sector, leaving many recyclers "spooked and opting to wait and monitor developments rather than negotiate or commit on new tonnage".
The shipbroker described scrap pricing as at and above $600 per ldt for tankers. However, cash buyers polled by TradeWinds said that prices of between $565 per ldt and $570 per ldt were a more accurate reflection on pricing going forward.
"It's a bloodbath," a senior executive at cash buyer Best Oasis said. "We are expecting prices to drop even further because the local economics are no longer supporting recycling."
Bancosta noted that an acute shortage of vessels persists, and there is currently "very little working firm for cash buyers and recyclers alike to offer on".
"As a result, this pause in activity may be artificial, and the impact on prices may be limited in real terms, particularly once we have actual workable candidates," the shipbroker said.
Limited arrivals
Vessel tracking website MarineTraffic indicates that most of the tonnage currently awaiting beaching or heading to Alang are smaller product/chemical tankers, offshore vessels, and a smattering of ro-ros and rigs.
Absent are the big-ticket vessels such as VLCCs and capesize bulkers preferred by Alang's recyclers.
The largest vessels due there are Best Oasis' former Petrobras product tankers: the 66,700-dwt sisterships Pirai and Pirajui (both built 1990), which are currently en route, and the 55,600-dwt Pedreiras (built 1993), which is expected to depart Brazil by the end of the year.
Best Oasis bought the trio on an "as is", "where is" basis in September 2020 via a Petrobras-organised auction, paying $9.08m in an en-bloc deal, which equated to approximately $219 per ldt. The low price was said to have reflected the cost of reactivating and repositioning the vessels to India.
Managers at the cash buyer attributed the long delay in their departure to the extended time needed to remove them from the Petrobras "system", as well as to get them ready to perform their final voyages. They had been laid up since 2018.
Both Venus Bulk Shipping's 32,100-dwt chemical tanker Melati Dua (built 1997) and Iolani Shipping's 37,808-dwt Banyan Pride (built 2002) are also scheduled to arrive at Alang within the next two weeks, according to MarineTraffic.
On 23 November, TradeWinds reported the Banyan Pride had been sold for $595 per ldt, or $5.7m, which is in line with Bancosta's India price indications.
Anchored off Alang awaiting beaching are Venus Shipping's 4,700-dwt chemical tanker Goldstar Nari (built 1999), which has been sold for an undisclosed sum, and Jaldhi Overseas' 8,800-dwt chemical tanker Jal Pari (built 1998), which was offloaded at $985 per ldt, or $2.95m, due to it having stainless-steel cargo tanks.
Benelux Overseas' 14,796-cbm LPG carrier Ramagas (built 1989), which IHS Markit reported as sold for $675 per ldt, or $4.5m in total, was anchored next to the two tankers, also awaiting beaching.
Offshore assets
On the offshore front, Atlantic Marine's 6,414-gt research survey vessel Atlantic Enterprise (built 1970) was awaiting beaching together with Pelmar Shipping's 3,300-gt offshore support vessel Siren (built 2009).
Egyptian shipowner Almanal Shipping's 8,300-gt ro-ro cargo ship Dodo (built 1979) was also en route to Alang on Wednesday.
Pakistani ship recyclers face a similar lack of large tanker and dry bulk tonnage, with Alker Navigation's 9,300-gt chemical tanker Vagabon (built 1996) being the only ship set to arrive this week.
The lack of available tonnage has forced Pakistani recyclers to turn to passenger ships, a type they have shunned for decades.
TradeWinds reported on Tuesday that the 56,800-gt cruise ship Antares Experience (built 1993) had arrived off Gadani after its cash buyer owner had sought offers from both Pakistan and India.
Monday also saw the Namma Shipping-owned, 11,700-gt ropax Masarrah (built 1977) beached at Gadani, another type of vessel rarely seen there.
