APL and Vale are sending ships to Alang despite a depressed scrap market.
Liner operator APL is continuing with its clear-out of what were previously post-panamax containerships with a deal to sell a second ship in the space of two months now having been concluded.
Sources close to the company told TradeWinds that the 5,100-teu APL Korea (built 1995) was due to arrive off Alang this week.
The Singapore-based company, a subsidiary of French liner giant CMA CGM, could not be immediately reached for comment on the sale due to public holidays in Singapore.
Market sources said that the deal comes as no surprise given that the company has been purging its fleet of older ships of this class size ahead of the IMO 2020 sulphur cap.
In late June the APL Korea’s identical sistership, APL Japan (built 1995), was beached in Alang after being sold for a reported $350 per ldt, or $8.3 million.
VesselsValues indicated that despite a soft Indian scrap market, the APL Korea had a demolition value this week of closer to $9.7m.
APL has three further ships of this HDW-built class, all of which operated under the US-flag until 2018, when APL scaled back its US-flagged fleet because of declining volumes of US government and military cargoes. They are also deemed to be potential scrap candidates.
APL now only has three US-flagged containerships.
Vale bulker arrives off Alang
Joining the APL Korea on the scrapheap is the Vale-owned, 150,000-dwt capesize bulker Ore Moatize (built 1997).
The vessel was anchored off Alang this week awaiting beaching.
Cash buying sources said that the deal to sell the Ore Moatize was tied up in late May at a price of $425 per ldt, which equates to $7.8m, although at today’s demolition prices the ship is worth a substantially lower $6.9m.
Vale acquired the Ore Moatize from Greece’s Neda Maritime in May 2009. The Brazilian miner paid $30m for the vessel, then named Penelope.
The two ships are among the very few being sold for recycling at present due to a soft market caused by a combination of low steel plate prices in India, Pakistan’s depreciating currency, higher taxes in Bangladesh, and the overall effects of the monsoon season.
Anil Sharma, the chief executive of major demolition cash buyer GMS, said earlier this month that the collective result was that prices had fallen by almost 15% in the Indian subcontinent within a period of two months.
Sharma expected the pace of scrapping to pick up in the fourth quarter as older, less-efficient ships are retired from service ahead of the IMO 2020 deadline.
