Demolition offers into the Southeast Asian market were well supported this week by the prevailing scarcity of available tonnages which is likely to last throughout Q4 2021, with market participants expecting the upward momentum to continue amid the ongoing coal and power shortages in global markets which have fueled steel prices in nearly all markets across Asia.
Buyers across Gadani were holding ground steady, eager to compete at high levels due to the rising price of imported scrap. Buyers notwithstanding currency depreciation, with the PKR last trading at 174 in the interbank on Friday, and disadvantaging position in terms of delivery costs for the larger LDT units aggressively continued to bid for larger vessels. Meanwhile, in terms of cutting activity, the week was relatively mediocre given the relative limited flow of units.
Demolition offers for Containers have been heard at levels around $610-620/LDT this week, up by $10/t from last week when offers were heard around $605-610/LDT. Similarly, Tanker offers were assessed around $605/LDT up from $595/LDT last week while Bulkers were quoted at $595/LDT this week as compared to $580-585/LDT last week.
In terms of a near term outlook, shipbroker Clarkson Platou Hellas informed, “In the present scenario wet tonnage has continued to dominate the demolition markets, and with the scarcity of tonnage set to continue, certainly the levels are destined to fluctuate around the $600/LDT level for some time. In relation to market supply, it remains very much bare, with few workable units being circulated”.
