Indian ship recyclers square up to Trump
Keen to take in valuable LNG carriers, Indian yards have also accepted a number of sanctioned units refused entry in Pakistan and Bangladesh.The foreshores of Indian recycling yards are hives of activity as Bangladeshi competitors wrestle with Hong Kong Convention (HKC) compliance issues and not a single yard in Pakistan has been certified for the convention.Some of the recent activity in Alang has resulted from the arrival of vessels sanctioned by the US Office of Foreign Assets Control (OFAC), according to the latest report from GMS, the world’s largest cash buyer of end-of-life ships.
The sanctioned vessels, understood to have been turned down at other recycling locations anxious not to risk violating US regulations, have headed to India, reported to the second largest supplier of sanctioned technologies to Russia. The alleged demo deals could be likely to land India in more trouble with Trump.
Amongst the recent arrivals in Alang are several aged LNG carriers which, GMS notes, are rich in non-ferrous materials and command a significant price premium. This is counterintuitive in some respects since analysts are predicting an imminent shortage of LNG carrier capacity as more production comes on stream, particularly in the US.
Construction yards are full, they point out, while retrofits and upgrades are commercially possible at repair yards that are not involved in the race to build new carriers. The projects are complex and expensive, but steam turbine conversions could result in a new lease of life for many elderly units.
Still leading the price table in theory, Pakistan has seen no new demo arrivals at its beaches for three weeks. Recyclers there have been reticent to accept smaller vessels owing to the complicated process of obtaining Documents of Authorisation for Ship Recycling certificates. DASRs are now understood to be issued there only to yards that are actively involved in HKC-related upgrades.
Meanwhile, Bangladeshi yards have not followed their usual pattern of a sharp market rebound following the monsoon months. As in Pakistan, yards show little interest in small units for which a complex series of mandatory requirements and regulations are now required. The arrival of LNG carriers at beaches in India has generated interest but no deals are thought to have gone through yet.Pakistani yards head the pricing league, at least in theory, with containers pitched at $450, tankers at $440, and bulk carriers at $420 per ldt. India is down ten dollars across the board; Bangladesh a further ten.
There has been virtually no international recycling activity in Turkey for nearly two years now, but theoretical prices are $270, $260, and $250 per ldt respectively, according to the latest GMS tally.
Source : Seatrade Maritime News Paul Bartlett