The Ukraine crisis has led to shipowners proving reluctant to continue with scrap sales of larger vessels as ship recyclers focus on smaller units, brokers and cash buyers say. A limited number of sales have been reported in the last week. “The last few days of the month have been completely thrown out of synch following the announcement of the Russian invasion of Ukraine,” said demolition broker Ed McIlvaney. “Certain tonnage which was placed to the market for sale has been withdrawn or [is] temporizing pending clarification and/or a resolution to the conflict,” he added. McIlvaney explained that several large bulk carriers were being discussed, but no deals have been concluded, although sales are likely to be revisited in time. The broker said cash buyers have been given permission in some instances to keep trading ships prior to recycling.

Cash buyer Best Oasis said volatility being experienced throughout the world is clearly reflected in the prices of “everything under the sun. During such unprecedented times it becomes difficult to make substantial buying decisions due to the fear of unforeseen changes, which is why most of the recyclers are looking for mid-sized tonnages and refraining from investment in large-sized tonnages, despite the robust steel market,” the company added. But Best Oasis said the Indian sub-continent ship recycling market is performing remarkably well, with stable demand and supply across the major recycling destinations. “Global dynamics will certainly re-align, impacting commodity flows as Russia is the world’s third-largest steel exporter after China and Japan, while combined, Russia and Ukraine control almost 10% of the total seaborne steel trade,” the company concluded.

The biggest cash buyer, Global Marketing Systems (GMS), said Bangladeshi scrappers have ramped up their buying and price offerings, mindful of the fact that sanctions could starve them of a supply line of ships for a short time. “Steel scrap prices have improved significantly in Bangladesh and India this week, leaving both markets positively poised going into March, whilst Pakistan slows down and waits to watch the international situation and subsequent market developments,” GMS added. The company said sanctions against state-owned Russian vessels will prevent them from heading for recycling yards. “As it stands, despite the ongoing international turmoil, recycling markets keep giving owners a viable end of life option at fantastic decade-high levels, while freight rates continue to perform admirably at present,” GMS added. McIlvaney reported the 106,000-dwt aframax Mikines (built 2003), operated by Germany’s Chemikalien Seetransport, as sold on private terms. The tanker has arrived in Primorsk, Russia, which could be a potential risk for the buyers, he believes. India owner Seven Islands Shipping’s 34,000-dwt handysize tanker Harmony (built 1999) was also said to have been sold at $650 per ldt in Colombo, Sri Lanka. The strong price includes 200 tonnes of fuel oil and 40 tonnes of gasoil. The ship is likely destined for Bangladesh.