THERE is a clear mismatch in the ship recycling market, where yards are unwilling to meet the prices being offered, reports Hellenic Shipping News Worldwide.
"Certain vessels achieve a certain price sometimes in this market and quite clearly, this week portrays why each sale can be individual, and not down to market conditions. It is reported a small container vessel of about 4,600 ldt has been committed basis delivery Bangladesh for region US$622 per ldt, creating a huge spread across all tonnage types," said Shipbroker Clarkson Platou Hellas.
"If this is indeed correct, then some reasoning unbeknown to many must be the answer as it would seem this far exceeds current pricing sentiment. The only possible explanation is that for such a small unit, a Letter of Credit can be opened from Bangladesh. Why are we surprised?"
"There have been reports of many units now sitting outside Chattogram (some for 4-6 weeks) waiting for L/C's to be opened and as such, several being diverted to India where they are offering lower rates which clearly shows the difficulties recyclers are facing from their banks.
The talk generally this week, is that of price levels weakening further from both Bangladesh and India and many doubt any rebound will be seen until after the holiday season, which is very much upon us, leaving most industry players, still scratching their heads with this latest container sale," said Clarkson Platou Hellas.
"Some good news arrived from Pakistan last week as it is felt that local recyclers could return to the bidding table soon."
"This is on the back of the IMF loan provided over recent weeks, which should result in offers finally emanating from Pakistan, although realistically, we do not expect this to happen for at least a couple of months," said Clarkson Platou Hellas.