Two Asian shipowners, Vietnam’s ITC Corp, and China’s Fuhai Shipping sold their oldest bulk carriers for recycling as 2022 ended. ITC Corp’s 27,00-dwt bulker was sold to cash buyers for onward recycling sale on an as-is basis in Vietnam at $460 per ldt, or $2.9m. This price is lower than recent sales made on a delivered subcontinent basis due to the costs the cash buyer will incur getting the ship to a recycling yard. The sale leaves ITC Corp with six other handysize bulkers, the oldest of which dates from 1995. Fuhai Shipping’s 12,000-dwt mini bulker Fu Ocean (built 1998) has been sold to recyclers in Bangladesh. The vessel is en route to Chittagong, where it is expected to arrive on 11 January. Cash buyers acquired the ship for $498 per ldt on an as-is basis in Batam, Indonesia with enough bunkers remaining on board for its delivery voyage. The Fu Ocean’s departure from the Fuhai Shipping fleet leaves the company with a single Handymax bulker.

Singapore-based cash buyer Wirana Shipping Corporation reported in its latest market report published on Monday that local steel plate prices in India have improved by about $18 per tonne, although imported scrap prices remain static for now. Local rebar prices improved by $10 to $15 per metric tonne due to improved demand from regional markets, mainly from large construction projects. Similarly, while imported scrap prices in Bangladesh remained unchanged over the past week, local steel plate prices increased by $20 per tonne, mainly on account low imports leading to shortage of material in local market. Shipbreakers in India and Bangladesh are offering up to $540 per ldt for tanker tonnage and $530 per ldt for bulkers, with Pakistan offering approximately $20 per ldt more for each type, according to Singapore-based specialist recycling brokers Star Asia Shipbroking. On the container ship front, offers from Pakistan are up to $590 per ldt, while they drop to $580 per ldt from India and $560 from Bangladesh.

With Ship recyclers from Pakistan and Bangladesh presently facing difficulties in opening letters of credit for imports, both Wirana and Star Asia say that India remains the only major destination for recycling of larger vessels on the Indian subcontinent. According to the World Steel Association, India’s steel demand is set for a 6.7% jump, about 120 MMT in 2023, which is the highest growth among major economies. Star Asia, in its latest market report, said buying in India is buoyant at the prevailing levels, with a vast majority of recyclers eyeing larger ships for green recycling and hopeful to see a decent supply in the first quarter of 2023. “For the Indian steel industry, the coming year will be a very promising year. India is in the middle of a building boom with a government initiative of modernizing roads, rails, and ports,” Star Asia said, while noting that while 2022 saw prices fluctuate from a high of $680 to $700 per ldt during the first quarter, to a low of $480 to $500 per ldt due to volatility in domestic scrap prices. “Markets have continued their stability for the past month, giving hopes of revival and gradually forming a trend that was very much needed for the industry,” Star Asia said.

Wirana said the supply of fresh tonnages has not yet increased as expected, and should the supply of fresh tonnage increase, prices offered by ship recyclers could come down. “We have ship recyclers who are waiting to buy fresh tonnage in view of good local demand for steel but are holding back due to expected price decreases. Which way the price will swing will depend on supply of fresh tonnage,” it said. Star Asia also cautioned that complex issues and risks ship recyclers faced in 2022 such as local currency fluctuations and restrictions, and problems obtaining letters of credit in Pakistan and Bangladesh have not gone away. These uncertainties, Star Asia warned, are likely to carry forward into 2023, at least for the initial period.