South Korea’s H-Line Shipping and Taiwan’s Evergreen Marine Corporation could soon provide some respite for South Asian recyclers who struggling to buy ships.
H-Line is negotiating a deal to sell its oldest capesize bulk carrier, the 149,000-dwt HL Power (built 1998), for Hong Kong Convention-compliant green recycling in India at $500 per ldt, or $9m, brokers reported over the weekend.
The Seoul-based shipowner told TradeWinds on Monday that a deal had yet to be concluded. The decision to recycle the ship was taken because of its age.
Singapore-based Star Asia Shipbroking said that ship recyclers in India are keen to grab two 5,652-teu containerships that Evergreen is marketing for recycling sales to India.
At 23,943-ldt, the Ever Unific (built 1998) and Ever Uberty (built 1999) will set a yardstick for container ships of such a size, whose presence at Alang has been absent for a long time, Star Asia director Rohit Goyaka said.
The past week saw only one recycling deal concluded, which involved a small Taiwanese-owned refrigerated fish carrier.
Win Shu Fisheries’ 3,700-dwt reefer Win Shuen Shing (built 1973) was sold to undisclosed cash buyers at $390 per ldt, or $857,000 on an as-is basis in Kaohsiung for delivery to Chattogram.
Small ships like the Win Shuen Shing have made up the bulk of sales to Bangladesh in recent months as ongoing issues in the country over obtaining letters of credit have precluded most recyclers there from buying big ships.
Smaller ships alleviate the need to obtain a letter of credit as their low acquisition costs can be financed by the internal funding mechanisms of most recycling yards in Chattogram.
Scrap price offerings out of India and Bangladesh fell by between 7% and 10% over the past week as markets came under pressure as uncertainty resurfaced amid falling domestic ship scrap prices due to weak demand and falling global ferrous scrap prices, said cash buyer Wirana in its latest market report.
“The tightness in ship supply is not encouraging the recyclers. In the coming weeks, markets will remain subdued, and recyclers will watch the global ferrous scrap price movement and domestic demand,” Wirana said.
Recyclers in Pakistan, already reeling from the country’s ongoing credit and currency woes, were dealt a further blow when the country’s central bank increased the base interest rate from 20% to 21%, which cash buyer Best Oasis noted would make financing scrap tonnage even more costly.
