Taiwanese owner Wan Hai has reportedly reached a conditional deal for the recycling of 10 of its oldest container ships.
Rumours in the scrap market suggest the company is waiting to lift subjects on the vessels at yards compliant with the Hong Kong International Convention for the Safe & Environmentally Sound Recycling of Ships.
TradeWinds is told that at least one of the recyclers requires a further audit over compliance questions.
There have also been contrasting reports as to the price levels agreed upon.
These range from in the upper $400s per ldt, to the low $500s.
TradeWinds earlier reported that the vessels were put up for sale with a 16 December deadline for bids.
The ships consist of four 1,088-teu and six 1,368-teu units aged between 24 and 28 years.
The company specified that they should be dismantled at one of 10 green recycling yards.
Delivery was expected between 13 January and 25 February.
Elsewhere in the scrap sector, the inability to obtain approval for letters of credit from banks in both Bangladesh and Pakistan remains very much a major obstacle to recycling, one broking source said.
Under the wire
There have however been a number of smaller ships delivered into Bangladesh with prices in the $520 to $530 per ldt range.
This kind of price puts the vessel comfortably under the minimum level to obtain approval for banking credit.
Cash buyer Wirana Shipping Corp said any price rises offered by Pakistan end-users are purely theoretical at the moment.
Another cash buyer, Best Oasis, called the market there non-existent.
Wirana reported that the United Arab Emirates and Saudi Arabia are weighing a proposal to increase financial assistance for, and deposits with, Pakistan by between $1bn and $5bn, which will help to increase the foreign exchange reserve position.
Demand building
"With current foreign exchange problems, we would not expect ship recyclers to be able to purchase fresh tonnages for some time," the company added.
In Bangladesh, two or three smaller ships have been acquired, Wirana said.
“In spite of lack of fresh imports for a few months, we have not seen an increase in local steel plate prices,” the cash buyer said.
“Ship recyclers are looking to buy fresh tonnage and thus as soon as the foreign exchange problem is resolved, we will see many ship recyclers who would be keen buyers,” it added.
Best Oasis also reported some demand for medium and large ships in Bangladesh.
“We recommend keeping away from the market until it has completely stabilised,” the company said.
