Two crude tankers have reportedly been sold for demolition in Bangladesh at the highest rates in recent years.
Despite a new wave of Covid-19 infections, market sources said ship recycling in the Indian subcontinent continues to present strong offers on the back of firm steel prices.
Brokers said Indonesia’s Buana Lintas Lautan (BULL) sold the 110,000-dwt Bull Sulawesi (built 1999) for $536 per ldt, or about $10.5m.
Separately, the United Arab Emirates-based Muhit Maritime was reported to have sold the 81,400-dwt Alasfal (built 2001) for $535 per ldt, or $8.93m.
Both deals were said to be done on a delivered basis. TradeWinds has approached Muhit and BULL for comment.
“The ever-growing demand for steel and lack of tonnage supply is pushing the prices to greater heights week on week,” wrote Best Oasis, a cash buyer of ships for demolition.
Bulker and boxship owners have mostly refrained from sending their vessels to scrap yards, with charter rates in their respective markets hitting multi-year highs.
In contrast, tankers owners have been more willing to recycle their vessels in recent weeks as spot earnings remain in the doldrums.
Clarksons Research data showed 18 tankers totalling 1.34m dwt were sold in scrap sales in March, the highest monthly figure in tonnage terms since June 2018.
Another 14 tankers with 497,000 dwt have been sold for demolition so far in April.
The research unit of shipbroking giant Clarksons observed “aggressive buying appetite from certain recyclers”, with limited scrapping candidates overall and a positive outlook for steel-plate prices in the subcontinent.
Covid-19 crisis
Among the main shipbreaking nations, India has been recording the world’s highest tally of new Covid-19 infections in recent days.
Ship-recycling activity in Alang has been nearly halted as oxygen is redirected from the industrial sector to hospitals.
While Indian recyclers are still looking for vessels that could be delivered in forward periods, cash buyers said tightening immigration controls and movement restrictions could curb market activity.
Meanwhile, demolition yards in Bangladesh and Pakistan have managed to continue their operations, as the outbreaks in the two countries are smaller.
“Pakistan and Bangladesh are leading the subcontinent market,” Best Oasis said. “The competitive prices being offered by end buyers are luring owners of ageing vessels to cash in on the soaring steel prices.”
