Fri. Jul 12th, 2024

Ship recycling prices surge through $600 per tonne

Bullish recycling yards in Bangladesh shelled out more than $600 per ldt for several unnamed ships last week in a market where tonnage supply is tight in the run-up to the Eid holiday.

Pakistan buyers still lag some way behind but may have to rethink their strategy if they want to secure tonnage in the months ahead, according to GMS, the world’s largest buyer of ships for cash.

Trailing tanker markets could ease tight tonnage supply but new regulations in Pakistan have been introduced following the beaching of a floating storage unit that had not been properly cleaned. Owners are reminded to make sure that tankers are properly prepared and cleaned for hot works before arrival at any sub-continent facilities, GMS noted.

Indian yards are in a stronger position following a recovery in local steel plate prices. Prices still lag behind other subcontinent facilities but the gap is narrowing. Offshore vessels, passenger ships, reefers and stainless steel tankers have found their way to yards in Alang amid a surprising lack of Hong Kong Convention green vessels, GMS said.

The latest recycling developments come against a backdrop of strong steel demand, strong forward projections and a bull run for iron ore prices. Speaking last week at the Singapore Iron Ore Forum, part of Singapore International Ferrous Week, Goldman Sachs’ Nicholas Snowdon, head of Base Metals and Bulks Research, said that the strong market was not likely to change any time soon. Demand is strong and suppliers have resisted the temptation to raise production, he said.

Iron ore prices are unlikely to remain above $200 a tonne but should remain firm around $150 well into next year, analysts agreed. Benchmark iron ore future have hit record levels in China this year with the most active contract on the Dalian Commodity Exchange, for September delivery, climbing to 1,241 yuan ($191.5) last 16 July.

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