Shipbreaking prices sink lower amid global uncertainty around Covid-19 spread in the last week of February, according to GMS report.
Recyclers shied away from buying fresh tonnages of scrap ship as the Covid-19 outbreak impacted global manufacturing supply chains. Depreciation of the Indian Rupee and the Turkish Lira also kept recyclers silent. Prices for shipbreaking imports are not expected to increase any time soon and may dip further in the near term as deals were settled at new lows.
India and Bangladesh restricted vessels arriving from China and other virus hit areas and enforced a 14-day quarantine before disembarking and beaching activities at Alang and Chattogram yards.
In Bangladesh, dry bulk, tankers and containers were priced at $360/lt ldt (long ton – light displacement tonnage), $370/lt ldt and $390/lt ldt, respectively, in the week ended Feb 28, down by $10/lt ldt from the prior week. Two scrapped ships were traded during the week; one smaller container of 5,249ldt at $381/lt ldt and a bulker of 7,636ldt at $360/lt ldt.
In India, dry bulk, tankers and containers were priced at $370/lt ldt, $380/lt ldt and $400/lt ldt, respectively, in the week ended Feb 28, down $10/lt ldt from the prior week. Indian market did see some deals above $400/lt ldt in early 2020, however, trades slowed in the last few weeks as recyclers turned silent. Indian steel plate prices in Alang dropped sharply amid depreciation of the Indian rupee against the US dollar. Indian recyclers bought a 22,159ldt ship at $389/lt ltd and a small cargo ship of 2,304ldt at $345/lt ldt this week.
In Pakistan, the prices for dry bulk, tankers and containers gauged at $350/lt ldt, $360/lt ldt and $370/lt ldt, respectively, down $10/lt ldt from the prior week. Pakistani buyers were less keen than their subcontinental competitors. Few buyers were keen in resuming purchases, but no trades were reported.
In Turkey, the local currency lira dropped to nearly TRY 6.25 levels against the US dollar last week. Lower demand for steel lead to a lack of interest in buying new tonnages. Turkish plate prices dropped to settle at $260/mt levels from a few weeks ago.