A fire-hit Indonesian aframax tanker has been sold for scrap in Bangladesh as the shiprecycling market continues to recover, multiple market sources reported.
Waruna Nusa Sentana concluded the sale of 105,000-dwt Jag Leela (built 1999) at $4.2m, equivalent to $278.5 per ldt, on an “as-is” basis, the sources said.
TradeWinds has approached the Indonesian firm for comment.
GMS, a cash buyer of ships for demolition, described the price tag as “firm” as the vessel lost significant steel in the casualty.
Waruna, one of Indonesia’s largest tanker owners, acquired the Jag Leela from India’s Great Eastern Shipping for $10.6m in 2013.
But a fire erupted aboard the tanker when it was dry docked in Waruna’s own shipyard in Belawan, Indonesia, in May of this year.
The incident killed at least seven crew members and injured more than 20 yard workers, according to Indonesian news reports.
The vessel has remained under tow in Belawan and a cash buyer will be responsible for moving the ship to Bangladesh.
South Asian ship recyclers have been showing more appetite for scrap tonnage in recent weeks, with firm steel prices and relaxation of lockdown measures.
On a delivery basis, tanker demolition rates in Bangladesh has improved to $350 per ldt from $310 per ldt a month ago, GMS data shows.
Some sources suggested the Chittagong-based yards are now keener to compete with their rivals in Pakistan, where scrapping rates are just higher by $10 per ldt.
“The demolition market kept being a lucrative option for owners willing to dispose their units,” brokerage Intermodal said in a research note.
Boxship owners with green recycle policy have generally preferred to scrap in India, where about 70 breakers are certified under the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.
But tanker and bulker owners, which generally do not take such initiatives, tend to favour Pakistani and Bangladeshi yards because they offer higher rates.
“The fact that Pakistan has emerged as the biggest player in the region, has boosted the competition, with Bangladesh seems that now have the momentum to prove its leading role in the coming months,” Intermodal added.
