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Ship scrappers facing ‘disjointed’ market

A total of 193 ships were recycled in the second quarter of this year, up from 181 ships in Q1. Right now, there is a ‘stand-off’ between ship recyclers and cash buyers, reports Greek shipbroker Clarkson Platou Hellas. This clash has created a ‘disjointed’ market.

Ship breakers appear happy to wait for rates to fall despite a clear lack of tonnage being made available. Clarkson Platou Hellas cautions that the summer holiday period in combination with an ‘aggressive’ monsoon season in India and Bangladesh will put additional pressure on the ship recycling sector. The shipbroker expects there will be no price increase in the forseeable future.

Intermodal Research points out that the demolition market has witnessed ‘unexpected activity’ in the last few days. For instance, a number of containers ships are en-route to the Indian subcontinent region; despite the recent impressive improvement in the dry bulk freight market it seems that owners of vintage tonnage (20+ years) are satisfied selling their vessels at current levels.

Analysts say they don’t expect to see this level of activity during the following weeks. In terms of prices, it is likely that discounted levels will be offered across the board. Average prices in the different markets last week for tankers ranged between US$ 270-420/ldt. And prices for dry bulk units ranged between US$ 260-410/ldt.

A total of 744 ships were scrapped last year. More than 90% of these vessels ware sent to beaching yards in South-East Asia. This year, the number of ships sent to shipbreaking facilities stands at 146 in Q2 and 142 in Q1.

Source: Hellenic Shipping News

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