22NOV2019 - NEWS - Older Tonnage Could Be Headed for Scrapping, Ahead of the IMO 2020 Rule
The upcoming IMO 2020 rule on the use of lower sulphur fuel oil could send more older tonnage for scrapping, as evidenced by last week’s surge in enquiries after months of lackluster performance. Still, market reports are contradicting each other, with some still reporting underwhelming numbers of demo candidates.
In its latest weekly report, GMS, the world’s largest cash buyer of ships noted that “after several weeks of all pervading negativity off of the back of slumping Bangladeshi steel plate prices, the rollercoaster nature of the international ship recycling markets was on full display this week, as prices and sentiments once again started to step towards being positive. Indeed, so troubled was the market in Chittagong that the BSBA (Bangladesh Shipbreakers Association) tried to form a cartel and impose a price ceiling of USD 350/LT LDT on any available units. This, expectedly, shifted the focus of Ship Owners and Cash Buyers towards the Indian (and to an extent Pakistani) market, where there was at least a modicum of stability as all else was failing, despite some mid-week Rupee wobbles. On the far-side, Turkey still continues on, albeit leaving Turkish Recyclers in a tricky position, as plate prices stay steady near the USD 270/MT market, with no meaningful tonnage to bid on”.