Elderly vessels are selling for previously "unthinkable" scrap prices as deliveries continue despite lockdowns and oxygen shortages in India and elsewhere.

Recycling end users are paying upwards of $550 per ldt for tankers and bulkers — up from $535 per ldt towards the end of April.

The 41,000-dwt handysize bulker Vika (built 1998) — owned by Vlad Shipping of Belize — was reported sold into Pakistan at this higher level.

At 9,664 ldt, this equates to $5.3m.

Demolition broker Ed McIlvaney said this was a level "unthinkable for a dry cargo unit only a few days ago".

Deliveries going ahead

"Despite all the major recycling markets remaining under numerous restrictions until at least 16 May, and yards virtually at a standstill, deliveries are still taking place with a few days' delay," he said.

The Covid-19 crisis has shut down breaking yards in India because of a shortage of oxygen needed for medical treatment.

This has not stopped "considerable quantities" of tonnage being secured, backed by the continuously rising steel prices worldwide, McIlvaney said.

Beaching is still possible at Chattogram, in Bangladesh, and Alang, in India.

And Pakistan has now declared a nine-day lockdown, with only a few sectors such as banks allowed to operate.

But buyers are still paying a premium for ships with a high content of specialised material.

The 20,000-dwt, 6,694-ldt tanker Falcon (built 1996) illustrated this, going for a reported $750 per ldt into India, due to it having 1,100 tonnes of stainless steel.

The vessel is listed in the fleet of Glory Ship Management of Singapore.

McIlvaney added that any tanker coming onto the market is achieving excellent levels.

Greek gain?

The 36,000-dwt, 8,388-ldt Sea Rider (built 2000), with a small amount of stainless steel, was reported to have achieved $570 per for prompt delivery in Pakistan.

The ship is operated by Sea World Management & Trading in Greece.

Cash buyer Best Oasis said demolition prices are reaching fresh heights week on week, with end buyers from Pakistan and Bangladesh constantly outbidding each other in an "intense competition" to secure tonnage.

"Ongoing conditions such as strict lockdown in India and Bangladesh, [a] shortage of oxygen and the upcoming festival holidays have definitely impacted the operations of recycling yards, but have not been able to cause any significant change on the steel demand and rising prices," the company said.

Best Oasis added that heavy demand for ship plates is encouraging competitive prices.