Shiprecyclers are struggling to conclude new deals as extended lockdown measures in the Indian subcontinent have prevented imports of scrap ships, according to market sources.
With India, Bangladesh and Pakistan extending lockdown by at least one to two weeks to control the spread of coronavirus, authorities remain reluctant to hand out new beaching permits, despite the limited operations of scrapping facilities.
“The toll on frustrated shipowners and cash buyers has started to tell,” Dubai-based cash buyer GMS said in a weekly note, adding that many earlier deals are up for renegotiation, as the vessels involved are still not scrapped.
“There is no way to import fresh vessels into any subcontinent location for recycling and there are still a number of vessels at various anchorages that have arrived, but have failed to obtain permissions for boardings and/or beachings.”
Market participants face great uncertainty even as some discussions are taking place on a speculative basis, not knowing when recycling facilities will be ready to receive scrap ships.
“It is unsurprising that owners are reluctant to offer tonnage to the market, with so many complications involved,” Clarksons Research said.
“Even if a buyer is willing to table an offer, deals are likely to include subjects relating to whether the end recycling destination is available.
“With many vessels still reported to be at anchor outside major recycling locations, there is still no clear indication as to when governments or port authorities will allow the import of ships.”
Bangladesh and Pakistan are not expected to see more activity before the Ramadan fasting month concludes on 23 May.
In India, where the authorities may soon allow vessels with a full Indian crew to beach, Best Oasis reported some cash buyers had been negotiating for ships available for green recycling on "as is" basis.
If those ships have foreign crew on board, their wages, management fees and other expenses would need to be borne by cash buyers until the vessels can enter recycling yards, Best Oasis added.
According to market sources, the lone deal in the past week was an en-bloc sale of the 30,000-dwt multipurpose vessels Hamburg (built 2002) and Jakarta (built 2003) at between $290 and $300 per ldt.
The ships, with 150 tonnes of bunker fuel, are set for a prompt delivery in Mumbai.
It is not immediately clear who the shipowner is. In February, Tufton Oceanic sold the two ships to unspecified interests. TradeWinds has approached Zeaborn, listed as shipmanager in the Equasis database, for further comment.
