Pertamina has sold an elderly storage tanker for scrap a full eight years after it was written off following a serious fire.
The Indonesian oil major’s 84,000-dwt floating storage and offloading unit Cilacap/Permina Samudra 104 (built 1975) is one of only two ships of any significant size that brokers reported at the end of last week as having been sold for recycling.
The FSO Cilacap/Permina Samudra 104 was sold for $328 per ldt, or $5.1m, on an “as is”, “where is” basis via a tender sale to undisclosed cash buyers who will have to tow it to a recycling facility on the Indian subcontinent.
The ship was declared a total loss in September 2014 after it suffered a major engine room fire that also destroyed the bridge.
Stationed off Tanjung Pemancingan in Kotabaru at the time, the Cilacap/Permina Samudra 104 was never repaired. Pertamina instead kept the ship in lay-up until asking prospective recycling buyers to submit their bids by 3 November.
Pertamina was one of two Asian tanker companies to sell ships for scrap in an otherwise moribund week in the demolition markets.
Petrovietnam Transportation reportedly sold its 33,400-dwt chemical tanker Song Hau Pn (built 1998) to cash buyers on an “as is” basis in Khor Fakkan. No pricing details were disclosed, although if sold to Indian recyclers, it would have obtained in the region of $560 to $570 per ldt.
With the big ships still largely absent from the recycling markets, arrivals at Alang and Chattogram over the past week mostly came in the form of a handful of small ro-ro vessels and fishing trawlers.
Singapore-based Star Asia Shipbrokers, in its recycling report published on Sunday, said scrap prices have been “correcting lower” as steel exporting nations start to drop their prices and ramp up supply despite falling demand.
“Overall, negative sentiments have begun to kick in the steel markets as the demand weakens internationally,” Star Asia’s report said, while noting that several ships that were sold in the past to cash buyers were now being proposed at significantly lower levels.
“As Bangladesh remains absent from the recycling markets for the time being, the absolute pressure is on Alang to absorb the tonnages, adding severe pressure to an already suffering market.
“In the broad sense, the demand for ships remains intact in the short term at the prevailing prices,” it added, while describing pricing trends out of India as stable, while Pakistan and Bangladesh are trending downwards.
