Two product tankers have been reportedly sold for scrap in Bangladesh at firm rates as the ship recycling market remains strong.
Brokers and cash buyers of ships for demolition said Sea Trade Maritime’s 109,000-dwt Sun I (built 2001) was recently sold for $449 per ldt, or about $8.91m on a lump-sum basis.
Global Karya Indonesia was said to have sold the 33,500-dwt Fortune Glory XLI (built 1997) for $475 per ldt, or $492m.
Asia-based sources said the company has the same address as Soechi Lines and that its ships are generally managed by Soechi-linked companies.
Both vessels were reportedly sold on a delivered basis.
TradeWinds has approached Sea Trade and Soechi for comment.
Strong market mood
Demolition rates have risen by over 50% in the Indian subcontinent since last June, boosted by strong steel prices.
Bangladeshi recyclers in Chattogram, as Chittagong was renamed, can still offer strong prices this month, but their rates are less competitive than what Pakistani breakers are paying, cash buyers said.
“Bangladesh appears to distinctly be in second place to their Pakistani neighbours,” Dubai-based GMS said in a note.
“Chittagong buyers may have to settle for smaller ldt units and those geographically-positioned in the area.”
More tanker scrapping awaited
Spot earnings in most tanker segments have been close to their multi-year lows in recent months, plagued by stubbornly low shipping demand during the Covid-19 pandemic.
Under normal circumstances, such weak market conditions would have triggered a significant amount of scrapping given strong demolition rates.
But old, large secondhand tankers have continued to be sold at prices significantly above their scrap values, as they are the preferred tonnage for operators involved in sanctioned Iranian or Venezuelan trades.
MRs tend to be younger and have a higher average scrapping age.
“For ships with special surveys or dry-docking soon, they could be candidates for scrapping,” a London-based broker said. “But there is still demand for vintage assets”.
Clarksons Research data shows just 11 tankers of 640,000 dwt have been sold in scrap sales so far this year.
“Scrapping has underperformed this year, in part due to there being a secondhand market for 20-year-old tonnage,” Gibson Shipbrokers research head Richard Matthews said.
“An owner can get more selling his vessel to a buyer who wants to trade the ship, than a scrap buyer.”
Jonathan Boonzaier contributed to the article.
