India gaining, Bangladesh losing shipbreaking orders

Global end-of-life ship brokerage GMS Inc. says that while this summer saw the price of ships to be salvaged fall by about $100 per light displacement ton (LDT), in the early autumn, nearly all the markets have enjoyed somewhat of an upward resurgence entering the fourth quarter of the year.

The Dubai, United Arab Emirates-based company identifies India as “the primary beneficiary” of the recent resurgence, saying some purchases have approached the $600 per LDT mark, representing a return closer to where prices were before the summer swoon.

GMS says demand from buyers in the active Alang, India, region has been ramping up, potentially linked to expectations of a successful G20 summit and the announcement of various infrastructure projects.

The global obsolete vessel brokerage calls Alang “the market of the moment” and as of mid-October “the most reliable destination for transacting letters of credit” in the Indian subcontinent. Pakistan has had intermittent United States dollar cash flow problems throughout the year, while the financial press more recently has reported similar problems in Bangladesh.

However, GMS reports that Pakistan has come back into the picture of late and several end buyers have even managed to secure letter of credit approvals to large vessels. The change of circumstance is likely tied to the nation’s government working out a $3 billion loan arrangement with the International Monetary Fund (IMF) this July.

In its most recent market update, GMS Inc. says, “Bangladesh has been the great disappointment of late, as prices tumbled uncontrollably during the summer” and letter of credit approvals “are struggling once again as steel plate prices remain stranded well behind their competitors.”

The ship brokerage firm says salvaged vessel tonnage this autumn has consisted mainly of retired container ships, with retired dry bulk vessels not fetching prices attractive to potential sellers.