Cash buyer GMS is predicting demolition prices may breach what it calls the 'mythical' $600 per ldt barrier due to a lack of ships.
The Dubai company said subcontinent markets are continuing to fire during the summer monsoon months, partly thanks to firmer steel plate values.
GMS believes scrap prices are now at "previously unthinkable levels", with Bangladesh buyers willing to pay $590 per ldt for boxships already, while tankers were attracting offers of $580 per ldt and bulkers $570 per ldt.
"Not since the boom year of 2008 have we seen levels quite so high, and as the mythical $600 per ldt draws ever closer, we will certainly see some fresh sales records being set from over the past decade," GMS said.
Prices have doubled
Prices have doubled over the last year, but the company warned that what goes up must eventually come down.
"Many in the industry are now starting to fear that the markets may have peaked already and are now adjusting their levels in anticipation of some kind of an adjustment in the immediate future," GMS added.
The cash buyer said tonnage supply has been increasingly centred around offshore units and tankers of late, especially smaller bunker ships, MRs and aframaxes.
GMS reported most yards in the region remain open and ready to accept vessels.
"Similarly, shipowners and shipbrokers continue to do business at these fantastic numbers whenever they can, especially as freight markets also remain strong across the dry bulk and container sectors," the company added.
Demolition broker Ed McIlvaney said recyclers are showing a determination to procure any tonnage with lightweights above 10,000 tonnes.
"This has once again continued to force prices northwards," he added.
McIlvaney reported Indonesian owner JSK Abadi Lines' 9,462-ldt panamax bulker Karunia (built 1993) sold into Bangladesh at $585 per ldt.
And the 17,724-ldt capesize K Phoenix (built 1996), owned by SK Shipping, was reported sold "as is" in South Korea at $553 per ldt, with about 200 tonnes of bunkers included in the sales price.
"Unfortunately, as is often the case, the less popular smaller lightweight tonnage do not achieve the same high levels but, based upon the current market, it is hard to believe that a shipowner would be dissatisfied with his write-down value presently," the broker added.
