Sinokor Merchant Marine is in the process of selling two pre-2000 ore carriers for demolition in a deal that suggests a further increase in prices.
European brokers said the 322,000-dwt Sino Merchant (built 1997) has been sold for scrap to Pakistan for $473 per ldt, or $17.7m. Sinokor purchased the vessel from Neu Seeschiffahrt of Germany for $25m in November 2012, when it was named Amy N.
Pakistan and Bangladesh breakers have been pushing up prices recently amid a shortage of sales candidates and increasing demand. Broker Best Oasis' most recent market report said Pakistan is offering $460 per ldt for bulkers, compared to $445 per ldt in Bangladesh and $425 per ldt in India.
Best Oasis, a cash buyer of ships for demolition, said that Bangladesh and Pakistan are fuelling the price rises.
"The subcontinent recycling market is on an upward march with Bangladesh and Pakistan leading the prices, and India following them just behind," the company said.
"As the global economy takes the path of recovery, the demand for steel is pushing up the prices of ship plates. It is giving a boost to end buyers to offer competitive prices for available tonnage."
All eyes will be on the next deal to see if prices harden further. Sinokor is also in negotiation to sell the 261,000-dwt ore carrier Sino Carrier (built 1992), and the vessel is expected to be sold for scrap in a few days. It was purchased as a VLCC from Mitsui OSK Lines in April 2007 for $42m and converted to a bulker.
The South Korean owner did not reply to requests for comment.
If the sales of the two VLOCs are completed, it would leave the company with one vintage VLOC unit, the 156,000-dwt Harmony Carrier (built 1991). Sinokor purchased this vessel as the tanker Front Maple from John Fredriksen’s Frontline for $40.8m in November 2007.
In January of this year, Sinokor sold the 267,000-dwt ore carrier Sinotrader (built 1993) for demolition to Bangladesh for $440 per ldt.
The South Korean company has a massive newbuilding programme with 20 containerships, 10 tankers and four LNG carriers at Hyundai Samho Heavy Industries.
Other reported deals also suggest prices are hardening.
India's Lion Ship Management has reportedly sold the 73,000-dwt bulker The Merciful (built 1997) for scrap to Pakistan for $480 per ldt, or $4.7m. The outfit purchased the bulker as the Coral Sea for $15.8m in August 2011.
