Two containerships recently sold for recycling are likely to be laid up until the scrapping market recovers.
The Sinokor Merchant Marine vessels were sold at a high price amid high demand for boxship scrapping on the understanding that the recent Bangladesh budget changes would not affect recyclers.
But indications are that scrapyards in the country will face higher taxes, according to recycling sources. The development coincides with a continuing slide in prices paid for demolition ships.
Tankers, for example, are down from about $440 per ldt to between $417 and $420 per ldt since 20 May.
The 4,250-teu Hongkong Bridge (built 2001) was sold for $472 per ldt, sources said, and the sistership Rotterdam Bridge fetched $482 per ldt, with its higher price factoring in a 52-tonne spare propeller.
Sinokor did not reply to a request for comment.
Ship demolition expert Ed McIlvaney described the achieved prices as “extremely high”.
He said it is very difficult to estimate what the real market value of the sisterships would have been if the outcome of the Bangladesh budget had been known at the time.
McIlvaney said maybe it should only be $430 per ldt for a large containership, adding that even this may not be achieved by the end of this week, as prices continued to slide.
McIlvaney said he had received feedback that no recyclers had been willing to match the price required by the boxship cash intermediaries. Sources informed him that the Hongkong Bridge and Rotterdam Bridge were likely to enter lay-up for the time being.
The impact of the Bangladesh budget for recyclers may not be known for at least another week.
Higher taxes
“No one knows to what extent higher taxes will go on the end product or on the ships coming in,” one broking source said.
Cash buyers and recyclers have consequently been less active, although the demolition sector is typically quieter at this time of year because of Ramadan and the onset of the monsoon season.
While demolition prices for tankers are down since 20 May by about $20 per ldt, bulkers have fallen from roughly $435 per ldt to $412 per ldt, according to the Baltic Demolition Assessment.
