19 March 2015

GMS weekly report on Bangladesh ship breaking industry for WEEK 11th 2015:

Bangladesh demand came roaring back this week, with many buyers keen to stock plots and fulfill bank limits, presumably for April deliveries, ahead of the monsoon season beginning end May early June.

Both the currency and local steel plate prices remained on an even keel and buying has been relatively muted in Chittagong over the recent past, owing to a freshly dispatched set of Chinese billets pre Chinese New Year and due to ongoing strikes and political unrest throughout the country.

One sale was concluded for the week as the Chinese controlled handymax bulker HE YUAN (8,679 LDT) was sold for a decent USD 365 per LT LDT.

Source: steel guru. 18 Mar 2015

GMS weekly report on India ship breaking industry for WEEK 11th 2015:

The bleak outlook on the Indian market following a lackluster budget worsened this week with local steel prices losing almost USD 20 per LT LDT value and the currency depreciating to just over INR 63 against the US Dollar.

Shocked end users therefore removed themselves once again from the buying, stunned yet again by another cruel reversal of fortunes for an industry that has suffered remarkably over the past 6 months or so.

For the time being, it seems as though most of the market tonnage will be diverted to a resurgent Pakistani and Bangladeshi market as India (where capacity remains good) stands to miss out on their share of the tonnage once again.

Despite the negativity, one container was concluded this week the MANUELA (8,018 LDT) at USD 380 per LT LDT ‘as is’ Singapore with 150 T bunkers ROB. It does seem that there will likely be a dwindling supply from this favored sector for Indian buyers, with the majority of dry vessels (particularly panamax and capesize bulkers) being diverted to Gadani and Chittagong shores.

Source: steel guru. 18 Mar 2015

GMS weekly report on Pakistan ship breaking industry for WEEK 11th 2015:

Having witnessed the Bangladeshi market click into gear last week, Pakistan buyers had to improve their levels in order to secure their share of the market tonnage.

Consequently, one or two vessels were concluded to Gadani end buyers at impressive rates.

The grain trading panamax bulker THE WATCHFUL (9,646 LDT) was the pick of the bunch, fetching USD 400/LT LDT (with 750 T bunkers remaining on board upon delivery). The handy bulker SHEHAB ALMUHIEDINE (5,677 LDT) was also concluded for a decent USD 380 per LT LDT.

With India seemingly out of the running at present, this interesting battle between Pakistan and Bangladesh looks set to resume during the course of the coming week(s).

Source: steel guru. 18 Mar 2015

GMS weekly report on Turkish ship breaking industry for WEEK 11th 2015:

The Turkish market continues to limber on with no meaningful respite coming to the aid of the domestic recycling sector, other than a marginal USD 5 per tonne improvement in prices reported this week.

With the price gap as compared to the Indian sub-continent market now gradually worsening (as Pakistan and Bangladesh made their respective strides this week), sheer desperation appears to be the key motivating factor behind the Turkish prices inching forward.

Notwithstanding the increase, the nearly USD 150 per LDT gap in levels that remains, will certainly ensure owners of larger units will divert their ships towards the sub continent markets, for the better levels on show there.

As such, local recyclers are left negotiating only small LDT tonnage that has been opening up in the region with a couple of units reportedly arriving the shorefront this week.

As fundamentals remain relatively unchanged, Turkish end buyers do not expect prices to improve much (if at all) and it does seem that the local market will perhaps linger in status quo mode in the coming weeks.

Source: steel guru. 18 Mar 2015

New vessel recycling app from GMS:

Global Marketing Systems (GMS) has launched a new mobile application that aims to provide market intelligence for the ship recycling industry.

The app, which is targeted at shipowners and brokers, provides information on vessel prices at selected recycling destinations, as well as a confidential valuation service and tidal information. GMS Weekly, the company’s industry newsletter, will also be delivered via the app.

“We are delighted to launch this brand new concept into the marketplace,” says Dr Anil Sharma, founder and CEO of GMS.

“Since establishing GMS, we have worked to modernise and promote the ship recycling industry, challenging old customs and looking for new ways to do business.”

“With exclusive local representation in all five of the major recycling markets of the world we have remained close to shipowners, to brokers and to ship recyclers, ensuring a continuing and unique insight into both the needs of our customers and into developments within their markets.”

The application is available on both Android and Apple devices.

Source: the digital ship. 18 March 2015

GMS weekly report on China ship breaking industry for WEEK 11th 2015:

Having concluded a number of capesize and panamax bulkers eligible for the subsidies, at decent prices from state owners since the end of Chinese New Year, Chinese scrap yards look set to be busy for the remainder of the year.

The subsidy runs until the end of 2015 after which, a more competitive international ship recycling industry is set to jump back into the frame.

Despite economic concerns, the government has been making encouraging noises during the communist party conference over the past few weeks, about growth and stimulus packages (if required) to keep China on track as the world’s second largest economy.

Source: steel guru. 18 Mar 2015

GMS announces new source for industry intelligence in the ship recycling industry:

In a first for the industry, Global Marketing Systems (GMS), the world’s largest cash buyer of ships, has launched a unique source for market intelligence in the vessel recycling industry, in the form of a new, easy to use, mobile application.

This new application delivers instant information on vessel prices at key recycling destinations; gives shipowners access to an unrivalled and confidential service that will value a vessel; and delivers GMS Weekly – the subscription-only inside track on recycling industry news. It also highlights delivery tides, and provides useful information for when trading across continents.

“We are delighted to launch this brand new concept into the marketplace,” says Dr Anil Sharma, Founder and CEO of GMS. “Since establishing GMS, we have worked to modernize and promote the ship recycling industry, challenging old customs and looking for new ways to do business. With exclusive local representation in all five of the major recycling markets of the world we have remained close to shipowners, to brokers and to ship recyclers; ensuring a continuing and unique insight into both the needs of our customers and into developments within their markets.
“This new resource has been developed as a result of that insight, providing industry information and confidential access to our expertise – all at the touch of a button,” adds Dr Sharma.
Targeted at shipowners, brokers and the ship recycling industry as a whole, the application is available to both Apple and Android users, and can be obtained from the respective app stores.

Source: Hellenic shipping news. 18 March 2015

17 March 2015

Concern grows over ship recycling methods

There is growing concern that the EU Ship Recycling Regulation (EU SRR) could undermine the Hong Kong Convention with regards to ship recycling methods.

The Hong Kong Convention aims to ensure that ship recycling does not threaten human health, safety, and the environment, whereas the EU SRR requests that European-flagged ships are recycled in pre-approved yards.

"The Hong Kong Convention is the ideal standard for ship recycling and should not be undermined [by the EU SRR]," said Yang Ming chairman Frank Lu at the Tradewinds Ship Recycling Forum in Singapore on 11 March.

However, the Hong Kong Convention has yet to be ratified, as it requires the endorsement of 15 states before it can enter force, whereas the EU SSR was implemented in December 2013.

Lu is also chairman of the Asian Shipowners Forum's ship recycling committee who have worked with the China National Ship Recycling Association to ensure their standards meet the Hong Kong Convention.

Chinese yards, which have dry docks for dismantling ships, are considered environmentally-friendly but the higher costs prevent them from offering competitive prices for tonnage, resulting in South Asia having the majority of global ship recycling.

"From a shipowners' point of view, China provides lower operational costs if the last port of call is in East Asia. And in NGOs' eyes, Chinese yards are greener. However, the disadvantages are the lower prices and a longer navigational time versus South Asia in some cases," Lu added.

"Although current methods in South Asia are viewed negatively by NGOs and may not yet comply with the [Hong Kong] Convention, South Asian yards can compete by offering high scrap prices and lower navigational costs for ships whose last port of call is in Europe or the Middle East," he said.

Shipowners usually sell their older tonnage to cash buyers, who re-sell the ships to recycling facilities. Lu pointed out that as legal ownership of vessels passes to cash buyers after the first sale, how ships are recycled is beyond the shipowners' control.

Lu said, "Shipowners should assess and select ship-recycling yards to demolish ships in a safe and environment-friendly [condition]. We should also continue to motivate recyclers to upgrade their yards to comply with the Hong Kong Convention.

Source: ihs maritime 360. 12 March 2015

Slump persists in Indian shipbreaking market

Prices of recycled tonnage continue to face downward pressure in India as the Indian currency and steel prices weakened again last week.

Prices of bulkers are hovering at USD350/ldt in India and USD365/ldt in Pakistan, largely unchanged from the previous week.

Dubai-based cash buyer Global Marketing Systems noted, "It has been an entirely underwhelming post-budget period in an Indian market that has witnessed constant falls over the past six months or so, with almost 30% being wiped off market prices there.

"Much will rest on the direction of the Chinese exports and whether steel billets will continue to invade subcontinent markets, significantly undercutting inventories already on end-user plots."

The influx of cheap Chinese steel is competing with demand for scrap steel and ship breakers have been lobbying the Indian government to impose import taxes on Chinese steel.

The bleak outlook on the Indian market following a lacklustre budget worsened this week with local steel prices losing almost USD20/ldt value and the currency depreciating to just over INR63 against the US dollar.

This has deterred ship recyclers from buying ships that are not short in supply.

Container ships, however, continue to be in demand due to the suitable draughts in India. Supply of box ships has also been drying up in Indian yards and the latter is looking to restock on this vessel type.

Reederei Hermann Wulff's 1993-built 1,661-teu Manuela was sold for USD3.05 million or USD380/ldt with 150 tonnes of leftover bunkers.

Pakistani buyers also purchased two bulkers that had significant amount of leftover bunkers.

SNP Shipping Services' 1992-built Panamax bulker The Watchful, fetched USD3.86 million or USD400/ldt as it had 750 tonnes of leftover bunkers, while 1985-built Handysize bulker Shehab Almuhiedine, controlled by Eastern Star Shipping, fetched USD2.16 million or a decent USD380/ldt.

Source: his maritime 360. 17 March 2015

16 March 2015

India's Steel Industries Kerala (SILK) has been ordered to stop shipbreaking at its Azhikkal yard due to the lack of a licence.

The Express News Service reported the district collector said SILK could not resume demolition until a permit had been acquired.

The yard had obtained a licence that only allowed equipment installation, according to collector P Bala Kiran.

SILK also builds small vessels and barges in Kerala.

Source: trade winds news. 16 March 2015

Cheap Chinese steel floods into India, spelling disaster for its ship breakers:

Alang

India’s imports of cheap Chinese steel between April 2014 and January 2015 were almost treble those of the previous fiscal period.

The country imported more than 2.9m tonnes, exerting more downward pressure on the scrapping rates offered by Indian ship-breaking yards.

Confirmation of the massive increase in steel billets from China came in a written reply to a question in the Indian parliament’s lower house, the Lok Sabha, this week, prompting calls for the introduction of punitive duties or even a temporary ban to give Indian producers some respite.

Steel and mines minister Vishnu Deo Sal said the government’s role was “limited” as steel was a deregulated sector – however, he offered the olive branch that the government was considering including a duty increase on semi-finished steels in the coming budget.

A cooling of the world’s second-biggest economy has left Chinese steel producers with too much product on their hands and, as a consequence, this is finding its way to export markets.

According to broker sources, Chinese steel scrap is on offer in the $250-$275 per tonne range, ex-quay Indian port, and this has had a disastrous impact on ship-scrapping rates.

Respectable recycling rates of around $500 per LDT were obtained by shipowners last June, but by year-end rates had plunged to below $400.Now, due to the Chinese competition, there are reports of sales at $300 per LDT, or less.

Understandably, owners and brokers are sitting tight, hoping to ride out the downturn, with just a few vessels currently being scrapped – largely due to acute cash flow problems.

Moreover, the vessel demolition market is also being challenged by a Chinese state subsidy of $150 per GRT to owners of China-flagged ships recycled at domestic breaking yards.

Scheduled to last until the end of 2015 – or longer– unsurprisingly, this subsidy has virtually excluded all internationally-flagged ships from scrapping in China. And it has added even more pressure to recycling rates in the Indian subcontinent.

The pessimistic outlook for scrapping rates comes at a bad time for container shipping, given the flood of newbuilds expected to hit the seas this year. As a result, owners may decide to lay-up surplus ships rather than accept depressed scrapping rates, hoping for new employment for them until scrapping rates recover.

Moreover, if fuel prices continue at their current level and ships, in particular those on ad-hoc voyages, speed up to reduce daily hire costs, fewer vessels will be required.

Consequently even more will need to be either idled or scrapped.

Source: the load star. 13 March 2015

Ships Beached for Scrap as Returns Reach Record Low:

Pakistani Scrap Yard

Scrap yards are preparing for record numbers of freighters as shipping rates tumble to all-time lows.

Owners may demolish 40 million deadweight tons of dry bulk carriers, more than double last year’s total, according to Arctic Securities ASA in Oslo. Rates to ship commodities slumped 66 percent last year amid a glut of capacity, the worst performance since the global recession.

China’s combined imports of iron ore and coal, the market’s biggest cargoes, fell to a two-year low last month, according to customs data. The nation last week set its lowest economic growth target in almost a generation, at a time when delivery of new ships will expand the fleet for a 16th consecutive year.
“The decision to scrap a ship is reactive rather than proactive,” Sverre Svenning, the Oslo-based director of research at Fearnley Consultants AS, said by phone March 9. “You decide to scrap a ship once you have had a sufficiently long period of negative earnings and you don’t see a light at the end of the tunnel.”

The Baltic Dry Index, a measure of the cost of moving everything from minerals to grains, reached a record-low 509 points Feb. 18, according to the Baltic Exchange in London. Owners responded by sending more than twice as much shipping capacity for demolition in January and February than they did a year earlier.

The gauge fell 0.9 percent to 560 on March 12. Average daily earnings for Capesize ships were $2,830 on March 13, the lowest since Aug. 23, 2012.

‘Huge Year’
Accelerated scrapping could help boost shipping rates for owners. Capesizes, the biggest dry-bulk vessels tracked by the Baltic Exchange indexes, will earn $16,000 a day on average in 2016, from $12,500 this year, Morgan Stanley estimates.

“It’s going to be a huge year” for scrapping, said Anil Sharma, chief executive officer of GMS Inc., the biggest buyer of vessels for demolition. “Most likely the biggest year for dry bulkers, especially for Capesizes.”

Not all owners are following the trend. Nippon Yusen Kaisha, the biggest Capesize owner, has no plans to accelerate demolitions, Brandon Kitamura, a spokesman for the Tokyo-based company, said March 6. Demand will be boosted by the completion of iron-ore mining projects in Australia and Brazil over the next two years, he said.

Companies may be less willing to get rid of ships because previous demolitions and a surge in deliveries of new vessels mean the fleet is getting younger, according to Nigel Prentis, the head of research at Hartland Shipping Ltd. in London. The average age of the dry-bulk fleet at the end of 2011 was 11.4 years, according to Clarkson Plc, the world’s biggest shipbroker. By December that was nine years.

Source: Bloomberg. 13 March 2015

Bangladeshis angry over Norway scrapping policy:

Local shipbreaker slams the Norwegian Shipowners’ Association as ‘cowardly’ for urging its members not to recycle vessels in Bangladesh

The Norwegian Shipowners’ Association (NSA) has come in for harsh criticism over its policy towards scrapping in Bangladesh.

The NSA strongly advises its members against recycling their ships in Bangladesh, unless it is closely monitored and undertaken as part of projects aimed at improving standards in line with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (Hong Kong Convention) .

“This is not a naming and shaming of Bangladesh,” the NSA’s head of environment, Tor Christian Sletner, told delegates at the TradeWinds Ship Recycling Forum in Singapore. “This is an expression of the standards we want. It could be other countries as well.”

Sletner says the NSA’s decision came after several attempts to raise ship-recycling standards in the country proved unsuccessful.

“It came to a point where the board of the NSA said enough is enough,” Sletner told TradeWinds.

Scrap method ‘not popular’

The NSA is also said to have taken into consideration the view that “we were doing things that the politicians, the media and public opinion did not like” in reference to ship scrapping in the Indian subcontinent.

Norway is one of only three countries to have ratified the Hong Kong Convention alongside France and the Republic of the Congo.

“We would love to work, as we have done for decades, with the shipbreaking yards in Bangladesh but we have to have a standard we can live with,” Sletner said.

But his comments cut no ice with some of the Bangladesh delegates at the conference, who criticised the decision to single out the country.

“You are so afraid of public opinion and the decision you have taken is a cowardly one,” said Mohammed Zahirul Islam of PHP Shipbreaking & Recycling Industries in Bangladesh.

“I would like to clarify that Turkey, India, Bangladesh and Pakistan are doing scrapping the same way. You call our way ‘beaching’, and you call their way ‘landing’ — but it is exactly the same.

“Why don’t you select the yards responsibly? There [are] a lot of good yards in Bangladesh that are doing ship recycling in a positive way.

“The NGO Shipbreaking Platform is winning because of people like you who are afraid to face the music. We are not afraid; this is our livelihood.

“Unless, or until, we move out of this climate of fear, then nothing will improve. You are putting everyone in the same basket, which is totally wrong. There are a lot of good yards in Bangladesh and you need to visit them to open your eyes.”

Source: trade winds news. 13 March 2015

12 March 2015

Shipbreaking feels the heat:

A collapse in prices and political pressures are creating problems right across the ship-recycling industry
The global ship-recycling industry is facing a nightmare scenario as low steel-plate demand, falling demolition prices and confusing regulation all threaten to throw the market into chaos.

The year kicked off with prices and recycled-steel demand continuing to slide, at a time when the collapse in the dry bulk shipping market is sending more and more vessels to the torch.

A devaluation of the Indian rupee has compounded the problems, denting breakers’ buying power in the world’s largest demolition country.

“Each day brings a further depression to the market,” broker Clarksons reported in the bleakest assessment of the situation so far.

Scrap prices for tankers and bulkers have slumped by around 15% to $375 per ldt since last year but some observers still feel the market remains overpriced given the low demand for steel plate.

That is likely to mean that the problem of waterfront breakers declining tonnage secured by cash buyers at higher prices, leading to renegotiation, will remain for some time.

Demolition broker Edward Mcilvaney has described a “vast number of sales” being renegotiated or dropped at the peak of the crisis earlier this year. And he suggests there are more high-priced vessels yet to reach the yards.

The breakers are suffering as China’s slower-than-forecast economic growth has led to an excess of steel billets and other products, which are then exported to India and other Asian countries, depressing local demand for steel plate from dismantled ships.

Nitin Kanakiya, honorary secretary of the Ship Recycling Industries Association India (SRIA), says from the breakers’ point of view, the market is still overpriced. “Ship prices are exorbitantly high because of a highly speculated market among the three countries of India, Pakistan and Bangladesh. The market is very dull and not corresponding to the price of ship plates available. Also, imported plates, TMT [thermo-mechanically treated] bars and billets from China and Ukraine, are almost $100 per ton cheaper than domestic materials. So it has become difficult to survive,” he said.

Kanakiya wants to see the gap between ship scrap values and steel prices close but is not optimistic. “We see less chance of recovery in the near future. The revival might take place by end of this year,” he added.

Cash buyer Wirana’s Billu Khetan says he had seen signs that would suggest the market has already bottomed out. “In the past two or three days, we have seen a slight improvement in steel prices and that should translate to better buying prices. Hopefully the decline has stopped,” he said. Such is his confidence that Khetan was willing to wager on prices heading back into the region of $400 per ldt in the coming months.

Anil Sharma, who heads cash buyer Global Marketing Systems (GMS), says he also feels the market is nearing the lowest point and an end to “dumping” by Chinese mills could turn things around quickly.

Healthy 2014 volumes

Prices started to fall at the end of last year but came too late to affect what was another relatively healthy year of demolition volumes.

According to Mcilvaney’s figures, in 2014, some 36.9 million dwt went to the breakers yard compared to 45.2 million dwt in the previous year.

India remained the world’s leading recycling nation, with 300 ships demolished last year. China, thanks largely to a generous domestic scrap-and-build subsidy scheme, broke up 248 vessels. Bangladesh demolished 215 units, Pakistan 113 and Turkey 109.

This year, the widely differing fortunes of the tanker and bulker markets are reflected in breaking volumes.

According to broker Clarksons, the buoyant tanker market has seen a 64% drop-off in scrapping volumes this year, while the struggling bulker market has experienced a 91% increase.

Leading the rush to the breakers torch are capesize bulkers, with around 18 already sold for recycling this year. About 75% of this year’ scrap deals have involved bulkers.

With Chinese yards now offering a much lower price, distorted by the subsidy scheme, cash-strapped shipowners are increasingly choosing to forget the pressure for green recycling and opt for the higher returns of the Indian subcontinent.

As a result, the international commercial green recycling market in China has crashed. “In October last year, the difference between China and the subcontinent was nearly zero but now there is a huge gap and owners want to go to India,” said Greig Green chief executive Petter Heier.

Fresh regulation from Europe could, however, strongly influence where owners opt to bring their end-of-life vessels.

Guidelines are currently being drawn up for recycling European-flag ships and it now looks like authorities will not accept yards using the beaching method. In effect, that will rule Indian, Pakistani and Bangladeshi facilities out of the European market.
GMS’s Sharma says the European Commission (EC) and environmentalists are unfairly demonising Indian subcontinent yards, despite progress being made by many on safety and environmental standards. “They make it sound like you are committing a sin if you go to the Indian subcontinent,” he said.

Yet the EC regulation is creating confusion among owners over what the acceptable standard for ship breaking yards will be. In the background, the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships is painstakingly working its way toward ratification, in what most governments and owners are relying on as the only hope to set a global standard.

Source: trade winds news. 6 March 2015

Bangladesh ship recycler defends beaching


A Bangladeshi ship recycler has reacted to non-governmental organisations' (NGOs') criticism of its beaching method.

Beaching, where ships are simply dismantled along the shores, is commonly practised in South Asia. NGOs have criticised the practise as polluting and unsafe for yard workers who are exposed to hazardous materials.

Mohammed Zahirul Islam, director of PHP Shipbreaking & Recycling Industries, was responding to a presentation by the Norwegian Shipowners' Association director and head of environment, Tor Christian Sletner, at the Tradewinds Ship Recycling Forum in Singapore on 11 March.

In response to the negative publicity about beaching, Zahirul commented that many Norwegian ship owners are recycling ships in China, Denmark, and Turkey, bypassing yards in South Asia altogether.

He said, "Unfortunately, because of our friends from the NGO Platform and media, you see one, two yards with accidents. [But] India has 130 yards, Bangladesh has 70 or 80 yards, Pakistan has more than 50 yards."

Zahirul's comments drew applause from the delegates.

He continued, "You see one accident and you go, 'Oh my God!'. You get so afraid that you go inside your room and you don't want to face the media. Why don't you select the yards responsibly? There're many good yards in Bangladesh and Pakistan that are doing recycling in a positive way. Unfortunately, we don't have the money to be in the media and advertise ourselves. And the NGO Platform is winning because of people like you, who are afraid to face the music. We're not afraid.

"This is our livelihood and we know we're doing it responsibly. Unless and until we move out of this 'I'm so scared' thing, nothing will improve. You're putting everyone in the same basket, which is totally wrong. There're many good yards. You need to visit them to open your eyes."

Source: ihs maritime 360. 11 March 2015

GMS weekly report on Bangladesh ship breaking industry for WEEK 09th 2015

Taking the initiative from competing sub continent markets from last week, Bangladeshi buyers started to display more aggression to acquire this week, with some decent numbers seen on available tonnage from cash buyer inventories.

Pakistan and India have taken a majority of capesize bulkers of late, so perhaps there will be a cool down and digestion period there whilst Chittagong buyers absorb their share of the upcoming tonnage (particularly for vessels positioned in the East).

Notwithstanding, bank financing remains a considerable issue and owners need to take great care in selecting the cash buyers they choose to work with so as not to get stuck for interminable periods of time waiting for LCs to open from end buyers who are yet to satisfy bank limits.

Source: steel guru. 10 March 2015

GMS weekly report on India ship breaking industry for WEEK 09th 2015

A surprising slump in sentiment and prices from India was seen this week, after the fairly uneventful budget announcement of last weekend.

Initially seen as positive, the fine print revealed that there would be a 5% increase in excise duty imposed on previously non excisable items (machinery and spare parts).

As such, end buyers strongly objected to this and decided to strike until Monday 9th March in protest (yards will be working but no loading or selling of materials will be done).

The hope remains that the ruling will be rescinded by what is seen as a generally pro business and flexible government of Mr. Modi. Contributing to the slowdown was a depreciation of the Indian Rupee by a wholepercentage point against the US Dollar (trading into the Rs.62s for the majority of this week).

Whilst many end users pause to take stock of the current predicament and assess whether the market will go further down, one market sale was reported as the Nasco controlled tween YONG JIA MEN (7,312 LDT) was committed for a decent USD 365/LT LDT (+ inward clearance costs for Buyers) with about 180 Ts bunkers remaining on board upon delivery.

Source: steel guru. 10 March 2015

GMS weekly report on Turkish ship breaking industry for WEEK 9th 2015

Stability seems to persist in the Turkish market as local steel plate prices stabilize and the demand from the end buyers continues to emanate primarily due to lack of supply of tonnage, which is likely due to the low levels witnessed so far this year.

Notwithstanding, it would be worth monitoring the price trend this week given the recent depreciation of the Turkish Lira and the expected on affect the local sentiment such corrections deliver.

Source: steel guru. 10 March 2015

GMS weekly report on Pakistan ship breaking industry for WEEK 9th 2015

Despite the sale of two high profile capesize bulkers last week, the EX OBO AQUA CHALLENGER (22,695 LDT) from Noble and the STAR YANDI (20,535 LDT) from Chartworld (both fetching around USD 397 -400 per LT LDT with about 2,000 and 1,000 tonnes of bunkers on board respectively), the Pakistan market failed to kick on this week and secure any more larger LDT tonnage.

End buyers have a keen eye on developments in India as usual as the overall reaction to the Indian budget in Gadani has been a negative one with end buyers seeking to find any excuse to drop prices yet further.

If this current trend continues, then local buyers will see much of their favoured tonnage diverted to Bangladeshi shores (even for units discharging West Coast side). An interesting week lies ahead to determine the immediate direction of prices once again.

Source: steel guru. 10 March 2015

GMS weekly report on China ship breaking industry for WEEK 9th 2015

As Chinese New Year holidays drew to a close this week, the key item for the market to address will be the export of cheap Chinese billets. Pakistani end buyers are lobbying to impose a massive 40% duty to curtail the imports that continue to kill domestic prices.

There are negligible duties on the steel in Pakistan and India currently and all sub continent locations are pressing hard to raise further taxes and prevent the inventories on their yards from being considerably undercut.

The aggre ssive scrapping policies adopted by the major state Chinese owners is set to continue this year with the government subsidies still in place until the end of 2015 meaning China’s recycling yards can expect to be busy throughout this new year of the sheep.

Source: steel guru. 10 March 2015

06 March 2015

Shipbreaking feels the heat:

A collapse in prices and political pressures are creating problems right across the ship-recycling industry
The global ship-recycling industry is facing a nightmare scenario as low steel-plate demand, falling demolition prices and confusing regulation all threaten to throw the market into chaos.

The year kicked off with prices and recycled-steel demand continuing to slide, at a time when the collapse in the dry bulk shipping market is sending more and more vessels to the torch.

A devaluation of the Indian rupee has compounded the problems, denting breakers’ buying power in the world’s largest demolition country.

“Each day brings a further depression to the market,” broker Clarksons reported in the bleakest assessment of the situation so far.

Scrap prices for tankers and bulkers have slumped by around 15% to $375 per ldt since last year but some observers still feel the market remains overpriced given the low demand for steel plate.

That is likely to mean that the problem of waterfront breakers declining tonnage secured by cash buyers at higher prices, leading to renegotiation, will remain for some time.

Demolition broker Edward Mcilvaney has described a “vast number of sales” being renegotiated or dropped at the peak of the crisis earlier this year. And he suggests there are more high-priced vessels yet to reach the yards.

The breakers are suffering as China’s slower-than-forecast economic growth has led to an excess of steel billets and other products, which are then exported to India and other Asian countries, depressing local demand for steel plate from dismantled ships.

Nitin Kanakiya, honorary secretary of the Ship Recycling Industries Association India (SRIA), says from the breakers’ point of view, the market is still overpriced. “Ship prices are exorbitantly high because of a highly speculated market among the three countries of India, Pakistan and Bangladesh. The market is very dull and not corresponding to the price of ship plates available. Also, imported plates, TMT [thermo-mechanically treated] bars and billets from China and Ukraine, are almost $100 per ton cheaper than domestic materials. So it has become difficult to survive,” he said.

Kanakiya wants to see the gap between ship scrap values and steel prices close but is not optimistic. “We see less chance of recovery in the near future. The revival might take place by end of this year,” he added.

Cash buyer Wirana’s Billu Khetan says he had seen signs that would suggest the market has already bottomed out. “In the past two or three days, we have seen a slight improvement in steel prices and that should translate to better buying prices. Hopefully the decline has stopped,” he said. Such is his confidence that Khetan was willing to wager on prices heading back into the region of $400 per ldt in the coming months.

Anil Sharma, who heads cash buyer Global Marketing Systems (GMS), says he also feels the market is nearing the lowest point and an end to “dumping” by Chinese mills could turn things around quickly.

Healthy 2014 volumes

Prices started to fall at the end of last year but came too late to affect what was another relatively healthy year of demolition volumes.

According to Mcilvaney’s figures, in 2014, some 36.9 million dwt went to the breakers yard compared to 45.2 million dwt in the previous year.

India remained the world’s leading recycling nation, with 300 ships demolished last year. China, thanks largely to a generous domestic scrap-and-build subsidy scheme, broke up 248 vessels. Bangladesh demolished 215 units, Pakistan 113 and Turkey 109.

This year, the widely differing fortunes of the tanker and bulker markets are reflected in breaking volumes.

According to broker Clarksons, the buoyant tanker market has seen a 64% drop-off in scrapping volumes this year, while the struggling bulker market has experienced a 91% increase.

Leading the rush to the breakers torch are capesize bulkers, with around 18 already sold for recycling this year. About 75% of this year’ scrap deals have involved bulkers.

With Chinese yards now offering a much lower price, distorted by the subsidy scheme, cash-strapped shipowners are increasingly choosing to forget the pressure for green recycling and opt for the higher returns of the Indian subcontinent.

As a result, the international commercial green recycling market in China has crashed. “In October last year, the difference between China and the subcontinent was nearly zero but now there is a huge gap and owners want to go to India,” said Greig Green chief executive Petter Heier.

Fresh regulation from Europe could, however, strongly influence where owners opt to bring their end-of-life vessels.

Guidelines are currently being drawn up for recycling European-flag ships and it now looks like authorities will not accept yards using the beaching method. In effect, that will rule Indian, Pakistani and Bangladeshi facilities out of the European market.

GMS’s Sharma says the European Commission (EC) and environmentalists are unfairly demonising Indian subcontinent yards, despite progress being made by many on safety and environmental standards. “They make it sound like you are committing a sin if you go to the Indian subcontinent,” he said.

Yet the EC regulation is creating confusion among owners over what the acceptable standard for ship breaking yards will be. In the background, the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships is painstakingly working its way toward ratification, in what most governments and owners are relying on as the only hope to set a global standard.

Source: trade winds news.