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Ship Recycling Activity Picks Up Ahead of Upcoming Monsoon Season

Ship Recycling Activity Picks Up Ahead of Upcoming Monsoon Season

Ship recycling activity has picked up considerably over the course of the past week, as a result of upcoming Easter Holidays and the Monsoon season in the Southeast Asian peninsula. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “the latest spike in price levels appears to stem from an incentive from the end users in Bangladesh to place tonnage on their yards prior to their budget announcement in the first week of June.

The rumors from the waterfront suggest that heavy import tax increases will be imposed which is pre-empting the local recyclers to continue their aggressive stance to ensure they have tonnage on their yards in case these rumors bear fruition. This position currently being experienced is also not just buying the vessel, but having a unit delivered to a recycling yard prior to the budget date.

With Ramadan due to commence early May and the budget timing in Bangladesh clearly in everybody’s minds, the next two weeks could become vital for any Owner wishing to take advantage of these impressively firm rates as, thereafter, the general feeling is that the market may see a decrease in levels back down to those on offer from Indian and Pakistan.

With the amount of Capesize bulk carrier units that have been introduced into the market, the feeling is that there are now only 2 or 3 actual breakers open for larger tonnage in Bangladesh, thereafter if levels do dwindle away, then we could expect the breakers in India and Pakistan to pick up the mantle. As has been seen in the past, on the back of an active sector in the market (i.e. capesize bulkers), suddenly the market is awash with rumors and gossip of many more such units, however actual sales reported this week remains minimal and perhaps Owners and brokers alike are just toying with the market to see whether any further improvements are achievable. However, if indeed the Chattogram (ex Chittagong) shores lid starts to burst, then some may regret being too optimistic! With the Easter holidays on the horizon, a slowdown in activity may start to be experienced with fewer sales candidates being circulated”, Clarkson Platou Hellas said.