GMS Market Commentary on Shipbreaking in Week 17 - Taking Time
As the number of Covid-19 cases continues to rise across the globe, the expected / enforced lockdowns across all subcontinent markets have been further extended until May 4, at least. However, there have reportedly been some small concessions made in India this week, as a select number of local recycling yards that have been actively practicing social distancing and ensuring protective gear is being provided to yard workers, are now being permitted to commence cutting activities slowly and responsibly. This does not mean that India is open by a long shot as all flights are still grounded, foreigners are denied entry, and any vessels arriving Alang for recycling are not being permitted into port limits, with no boardings, beachings, and deliveries taking place yet. The expectation is that things are going to move at a slow and methodical pace, until the virus is brought under control, across all subcontinent locations & Turkey and lockdown measures could well be extended further, as with many parts of Europe and Asia, where shutdown and quarantine measures have been extended until June 1. Finally, with the onset of Ramadan, countries celebrating the religious month are expected to remain out of the game for the most part, which may come hand-in-hand with the ongoing global quarantine and lack of any workable tonnage presently in the market.
Bangladesh - Last week, many in the industry were surprised to hear about the sale of the Sinokor controlled VLOC HBIS SUNRISE 38,222 LDT for a decent USD 310/LT LDT, basis an 'as is' Singapore delivery with about 2,700 Tons of bunkers remaining on board at the time of delivery. Since no crew can travel for the take over in Singapore, the Buyers intend to retain Seller's crew on board until they are able to mobilize their crew for take over, once the markets start to open up again. Logically, with all subcontinent locations currently closed, the resale destination remains unclear at this juncture. So it certainly is a speculative purchase from the concerned Cash Buyer. However, with the vessel being in Singapore and provided that post-closure prices are not drastically off, she will likely be a Bangladesh candidate, especially given the preference of Chattogram Recyclers for larger LDT vessels. As it stands, the Bangladeshi government has extended their lockdown measures until May 4lh and it is likely that there will be no clearance on existing vessels until then and no import of fresh vessels will be permitted either. Yards remain closed in Chattogram and no cutting activity is currently taking place. Finally, during the month of Ramadan, it is expected to be a quieter period as citizens are urged to self isolate and practice social distancing.
India - There was some easing of restrictions in Alang this week, as a very few select yards were granted special permissions and were allowed to resume limited cutting operations, so long as their workers continued to strictly practice safe social distancing regulations and were being issued the appropriate safety equipment. To be clear, no new arrivals of fresh vessels have been allowed and even vessels still stuck at anchorage are being denied boardings and beaching permissions for the time being. Foreign crew are not being allowed into India and flights are not operating to permit Indian crew to fly out in order to take over any as is vessels either. As such, the Indian market remains on a total shutdown with virtually no activity emanating from Alang. Finally, info on steel plate prices and the levels to expect once the market is reopens has yet to really emerge from the Alang, even though it is clear that the currency has drastically depreciated by nearly 10%, from Rs 71 to briefly over Rs 77 against the US Dollar of late.
Source : Strategic Research Institute