Ship recycling sales slowed from 15 to 19 June as the monsoon season and Ramadan took their toll on the market.
In addition, brokers suggested that with the recent rebound in dry bulk freight rates, owners might be less willing to scrap ships.
The Baltic Dry Index’s drop to an all-time low in February precipitated a deluge in bulkers being sold for scrap, resulting in scrap prices falling from USD400/ldt a year ago to about USD360/ldt today.
In Bangladesh, many yards are well-stocked with inventory and are in no hurry to acquire ships.
Steel prices have fallen during the last few weeks and owing to continuous monsoon rains and shorter working hours due to Ramadan, local yards have not been able to work fast at demolishing ships.
Kaili Shipping, however, managed to sell 1983-built Handymax bulker Kai Hong for USD3.01 million or USD360/ldt.
In India, falling steel prices made local yards hesitant to commit to tonnage, although Hong Sheng Da Shipmanagement’s 1984-built log carrier Xing An Da was sold for USD2.49 million or a decent USD370/ldt.
In Pakistan, the sale of Enterprises Shipping & Trading’s 1993-built Panamax bulker Miden Max bucked the trend when it was sold for a very firm USD3.82 million or USD385/ldt, as it had 200 tonnes of leftover bunkers.
However, Dubai-based cash buyer Global Marketing Systems (GMS) doubted that the transaction would be executed.
GMS said, “In this current market climate, there is of course no guarantee that the deal will be performed and it does seem to be a curiously strong price – albeit one that has an India option attached as well.
“Until the huge number of vessels on plots starts to subside and some clarity on the budget is seen, it is not worth expecting much from the Pakistani market at present, and this may remain the case over the course of the summer/monsoon months.”