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Ship recycling market waking up after disappointing summer

The global ship recycling market is showing ‘some signs of revival’, according to shipbrokers.

‘We have started to see more enquiries from recyclers, which may finally result in suitable bids being tabled,’ says shipbroker Clarkson Platou Hellas. ‘This is an encouraging sign which we haven’t seen over the course of the summer. However, it may be some time before prices react positively following the continued depressed local steel rates.’

Ship owners may start to take notice of the ‘improved appetite’ and will likely make a decision to sell any of their ‘vintage’ assets in Q4.

‘Given that some fresh tonnage has been sold to Indian Sub-Continent yards recently, sentiment has started to improve in the market,’ adds Allied Shipbroking. It’s worth noting that the positive momentum in freight markets are limiting the interest by owners to proceed with recycling of their units at the moment.

‘In Bangladesh, offered prices have started to move upwards after several weeks. However, activity has remained subdued so far,’ Allied Shipbroking observes. Meanwhile, things have started to stabilise in India. Over there, demand has improved after a recent rise in both offered prices and local currency movements. This is expected to result in transactions during the following weeks.

‘In contrast, activity in Pakistan seems to be far from any rebound,’ the broker reports. Unless significant measures can be taken from local authorities in order to make the industry more competitive again.

The world’s leading cash buyer of ships GMS points out that subcontinent markets ‘finally appear to be turning positive’ as nearly all locations posted some gains off the back of settling steel plate prices and stabilising currencies. It agrees demand is starting to pick up once again with all port reports showing Indian subcontinent markets starved of tonnage / new arrivals.

The truth about beaching

In other news, the NGO Shipbreaking Platform is eager to share an ‘undercover’ documentary made by Dutch journalists for the TV programme Zembla. The 40-minute feature is available (with subtitles) on Youtube – you can watch it here:

The documentary crew investigates SBM Offshore’s criticised shipbreaking practices in South Asia. Zembla reconstructs the last voyage and scrapping of the mercury-laden tanker YETAGUN, owned by the Dutch oil and gas multinational. The gas tanker was sold for breaking to Hooghly Shipbreakers Ltd, a beaching yard in Alang, India.

Undercover recordings and discussions reveal that workers are not provided with appropriate personal protective equipment. In fact, workers only receive full safety gear when government inspections take place. Besides, toxicologists that have reviewed the documents obtained by Zembla conclude it virtually impossible that no high levels of mercury were detected during cutting operations, as claimed by apanese classification society ClassNK.

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