Ship recyclers remain ravenous for vessels as steel plate prices rise, but this hunger has yet to be matched by the willingness of shipowners to sell.
Demolition broker Ed McIlvaney said there has been an "increased surge" of interest from the waterfront, with many recyclers keen to secure whatever type or size of vessel becomes available to the market.
"Unfortunately, their eagerness has not yet been matched with a fresh input of tonnage, although a number of units reportedly from cash buyers' hands are undergoing negotiations but have not yet reached conclusion," he said.
GMS, a cash buyer of ships for demolition, said a jump in steel plate prices in the previous three months appears to have swept across all major recycling markets, including China, this week.
The company added that price rises have ranged from $5 per tonne in China to $30 per tonne in Turkey.
Tanker scrapping on the rise?
GMS has noted more tankers being delivered to breaking beaches on a weekly basis, while strong bulker and containership markets are keeping recyclers "starved" of vessels in those sectors.
"We have seen very few bulkers and containers for a majority of this year, with even older 90s-built units passing surveys to continue trading, such has been the strength of current freight rates," GMS said.
The company added that it does not expect scrap prices to decline significantly any time soon.
And the buyer is tipping "another frantic finale" to 2021, as prices remain firm at historically high levels and tanker markets stay weak.
GMS is quoting a price of $610 per ldt for containership in Bangladesh, with tankers at $600 and bulkers at $590.
Pakistan is paying $10 less than this across the board, and Indian is another $20 back on Pakistan.
McIlvaney said India remains some way adrift of rivals on pricing for large vessels, but is now "considerably closer" on mid-size and small ships than has been the case for some time.
He reported Indian breakers securing Pilatus Marine's small 1,423-cbm LPG carrier Pilatus 15 (built 1986) at $600 per ldt or $500,000.
No destination has yet been reported for 2Go Group's 19,500-gt ro-pax St Leo The Great (built 1992) .
The price was said to be $400 per ldt or $2.9m. The ship was sold in Manila in the Philippines.
Rapid improvement
Cash buyer Best Oasis said the Indian sub-continent recycling market is showing rapid signs of improvement as the demand for steel is soaring day by day.
"The end-buyers are eagerly scouting for available tonnage in the demolition market as the raw material prices have risen sharply and steel producers are turning towards scrap metal for meeting their needs," the company said.
Best Oasis notes offers increasing in all three key markets as vessels remain scarce.
This provides "a favourable market" for shipowners with ageing assets, the company added.
"With the current demand-supply dynamics, we believe the prices will remain steady and sustain their highs in the coming weeks," Best Oasis said.
Steel market sentiment is currently bullish due to high demand from all major end-user industries, especially the construction and car making sectors.
