SHIP DEMOLITION REPORT AND MARKET ANALYSIS

Transcription

1 SHIP DEMOLITION REPORT AND MARKET ANALYSIS The surprise came last week from Bangladesh where the High Court of Justice ruled on March 18 th, 20 that all ship recycling yards not operating with environmental clearance should be closed within two weeks. As none of those yards operate under such requirement, this would have practically meant for all Chittagong-based yards to stop their activities. The court decision detailed several measures vessels (cleaning-up, safeguards measures ) should be complying with before entering Bangladesh for ultimate disposal. The consequences were immediate: the local banks stopped processing of Letters of credit, the Director General of Shipping refrained issuing the so-called no-objection certificate making any further imports of recycling ships not possible. The entire Bangladeshi ship recycling industry was frozen just as the prices were getting above the USD 350/- per Lightweight level. We now understand that the matter is in the process of being solved with a petition successfully filed against the decision of the High Court of Justice. However recent sales to Bangladeshi breakers at improved levels may come under pressure and may be re-negotiated by parties taking advantage of this situation. The Indian market continues to be depressed with the exchange rate of the Indian Rupee depreciating against the U.S. Dollar and the local steel market falling down. We estimate the price correction the Indian market sustained to be between USD 25/- and USD 30/- per long ton Lightweight. The about tons of Lightweight to be delivered to Alang-based shipbreakers should not be supportive of any price recovery at very short term. Despite ongoing political problems, the Pakistani shipbreakers have been able to take advantage from the situation on both Indian and Bangladeshi markets in securing two further units for recycling. Since the beginning of 20, more than tons of Lightweight have been beached in Gadani Beach corresponding to a market share of 13% of the vessels delivered to recycling yards. The Chinese market has further dropped this week with prices below USD 200/- per Lightweight for tankers and large bulkers. Prices related to green dismantling are about undergoing the USD 150/- per long ton Lightweight depending of the type and size of the concerned units. Despite the massive flow of vessels delivered to Chinese breakers for green dismantling, the market share of Chinese market remains below 10%. 1

2 INDIA SALES MSC TAMPA Container Ship dwt 1984 blt ldt USD 280 MSC EDNA Container Ship dwt 1970 blt ldt USD 285 MSC GIULIA Container Ship dwt 1970 blt 8670 ldt USD 290 COMMANDER General Cargo Ship dwt 1976 blt 6935 ldt USD 3 GLOBAL PROVIDER Passenger/ Vehicle Ferry 6670 dwt 1981 blt 5289 ldt USD 283 As is Fujairah ARCTICA General Cargo Ship 4990 dwt 1973 blt 2937 ldt USD 360 DUBAI DIAMOND Container Ship 8717 dwt 1988 blt 5782 ldt PNC TAO YUAN General Cargo Ship 292 dwt 1979 blt 8176 ldt USD 250 As is Taiwan YE LAN General Cargo Ship dwt 1979 blt 8172 ldt USD 260 As is Kaohsiung DUBAI TRADER Container Ship 8717 dwt 1987 blt 5376 ldt USD 280 RUBY RAY Vehicle Carrier dwt 1978 blt 9376 ldt PNC 11 vessels tons ldt sold 2

3 ALANG PORT POSITION ETA Arrived Beached MIKHAIL STENKO General Cargo Ship 8540 dwt 1975 blt 4470 ldt CELJE General Cargo Ship dwt 1977 blt 6005 ldt MSC GIULIA Container Ship dwt 1970 blt 8670 ldt MSC EDNA Container Ship dwt 1970 blt ldt VASILIY BELOKONENKO General Cargo Ship 8514 dwt 1974 blt 4470 ldt RUBY RAY Vehicle Carrier dwt 1978 blt 9376 ldt MSC TAMPA Container Ship dwt 1984 blt ldt ELLISPONTOS Bulker dwt 1981 blt 7181 ldt SVYATAYA YELIZAVETA Bulker dwt 1974 blt ldt A SHUJAA I General Cargo Ship dwt 1982 blt 8966 ldt ZARECHENSK Bulker dwt 1968 blt 7295 ldt VULTURNUS Bulker dwt 1978 blt 87 ldt CAP DOMINGO Container Ship dwt 1984 blt 4025 ldt DAFNIS General Cargo Ship dwt 1981 blt 6842 ldt HENA Bulker dwt 1977 blt 8516 ldt MIRA Bulker dwt 1980 blt 7338 ldt DARIA General Cargo Ship dwt 1979 blt 5242 ldt TRADER Container dwt 1982 blt 5358 ldt RANGE Roro 4216 dwt 1985 blt ldt GOLDEN SUN Bulker dwt 1977 blt 5701 ldt GOLDEN BRIDGE Container Ship dwt 1984 blt 7451 ldt vessels ldt beached 3

4 BANGLADESH SALES DURI Bulker dwt 1986 blt ldt USD 335 YIN YUAN Bulker dwt 1972 blt 5646 ldt USD 290 SALAM PANJANG Container Ship 7727 dwt 1978 blt 3100 ldt PNC 3 vessels tons ldt sold 4

5 CHITTAGONG PORT POSITION ETA Arrived Beached GULF LION Tanker dwt 1981 blt 7271 ldt PROCESS Tanker dwt 1984 blt 8450 ldt LA FORGE LPG Carrier dwt 1981 blt ldt BUANA Bulker dwt 1977 blt 4135 ldt SIDRATUL MUNTAHA Bulk Wood Chip Carrier dwt 1975 blt 6982 ldt vessels tons ldt beached 5

6 PAKISTAN SALES ASMAA Tanker dwt 1983 blt 4190 ldt PNC ASTIR Bulker dwt 1977 blt 7189 ldt PNC 2 vessels tons ldt sold GADANI PORT POSITION ETA Arrived Beached SIBI Dry Cargo Ship 3010 dwt 1981 blt 6733 ldt SUTHATHIP NAREE Bulker dwt 1983 blt 6935 ldt vessels tons ldt beached 6

7 CHINA SALES YANTALLES General Cargos Ship 3930 dwt 1968 blt 1959 ldt USD 200 LA PALOMA Bulker dwt 1990 blt ldt USD 205 Main engine damaged KAVALEROVO General Cargo Ship 3860 dwt 1970 blt 2210 ldt USD vessels tons ldt sold PORT POSITION NO NEW VESSELS REPORTED ETA Arrived Beached 7

8 MARKET PRICES EVALUATION DRY TONNAGE WET TONNAGE TREND INDIA USD 270 USD 280 BANGLADESH USD 285 (last week) USD 350 (last week) Difficult to assess a current price level due to possible consequences of court order. PAKISTAN USD 270 USD 280 CHINA USD 150 USD 185 TURKEY USD 140 USD 145 The above price guidances are based on a standard / average ship type of about 10,000 ldt, with fairly prompt delivery. The trend reflects Eckhardt Marine s perception of the possible market development on a short term basis. 8

9 $/ldt BDA for Bulk Carrier (Figure 1) Index BDA Bulk Carrier Subcontinent BDA Bulk Carrier China BDI Figure 1: Illustrating the evolution of the Baltic Exchange Demolition Assessment (BDA) for bulk carrier in contrast to the Baltic Dry Index. The assessment of the BDA is based on a bulk carrier (7,000 12,000 long tons light weight), gas free for man entry, delivery basis as is, under own power, cash price, basis standard commission. Delivery China and Subcontinent respectively on a 15/30 days basis. Figures provided by The Baltic Exchange Ltd. 9

10 $/ldt BDA for Bulk Carrier vs. Secondhand Sales (Figure 2) Index Bulker: Secondhand Sales BDA Bulk Carrier Subcontinent BDA Bulk Carrier China BDI Figure 2: Illustrating the evolution of the Baltic Exchange Demolition Assessment (BDA) in contrast to the Baltic Dry Index and selected secondhand sales. The secondhand sales bars reflect the price per long ton light weight paid for a bulk carrier (7,000 12,000 long tons light weight), aged between 20 and 23 years. Figures provided by The Baltic Exchange Ltd. 10

11 $/ldt BDA for Tanker (Figure 3) Index BDA Dirty Tanker Subcontinent BDA Clean Tanker Subcontinent BDA Dirty Tanker China BDA Clean Tanker China BDTI BCTI Figure 3: Illustrating the evolution of the Baltic Exchange Demolition Assessment (BDA) for tanker in contrast to the Baltic Dirty Tanker Index (BDTI) and the Baltic Clean Tanker Index (BCTI). The routes are based either on a dirty tanker (15,000 25,000 long tons light weight) or product tanker (6,000-10,000 long tons light weight), gas free for man entry, delivery basis as is, under own power, cash price, basis standard commission. Delivery China and Subcontinent respectively on a 15/30 days basis. Figures provided by The Baltic Exchange Ltd. 11

12 BDA for Tanker vs. Secondhand Sales (Figure 4) $/ldt Index Tanker: Secondhand Sales BDA Dirty Tanker Subcontinent BDA Clean Tanker Subcontinent BDA Dirty Tanker China BDA Clean Tanker China BDTI BCTI Figure 4: Illustrating the evolution of the Baltic Exchange Demolition Assessment (BDA) for tanker in contrast to the Baltic Dirty Tanker Index (BDTI) and the Baltic Clean Tanker Index (BCTI) as well as selected secondhand sales. The secondhand sales bars reflect the price per long ton light weight paid for a dirty tanker (15,000 25,000 long tons light weight) or a product tanker (6,000 10,000 long tons light weight), aged between 20 and 23 years. Figures provided by The Baltic Exchange Ltd. 12

13 Volatility of the BDA index since initial quotation in % 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% 01/05 03/05 05/05 07/05 /05 11/05 01/06 03/06 05/06 07/06 /06 11/06 01/07 03/07 05/07 07/07 /07 11/07 01/08 03/08 05/08 07/08 /08 11/08 01/ 03/ D/TKR_CHINA ( : $358) D/TKR_SUBCON ( : $440) B/C_CHINA ( : $330) B/C_SUBCON ( : $387) C/TK_CHINA ( : $351) C/TKR_SUBCON ( : $424) 13

14 Volatility 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Volatility of the BDA index (Bulk Carrier) based on the previous quotation BDA $800 $700 $600 $500 $400 $300 $200 $100-50% $0 01/05 03/05 05/05 07/05 /05 11/05 01/06 03/06 05/06 07/06 /06 11/06 01/07 03/07 05/07 07/07 /07 11/07 01/08 03/08 05/08 07/08 /08 11/08 01/ 03/ 05/ Volatility: B/C_CHINA BDA Bulk Carrier China Volatility: B/C_SUBCON BDA Bulk Carrier Subcontinent 14

15 Volatility 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Volatility of the BDA index (Bulk Carrier) based on the previous quotation BDA $800 $700 $600 $500 $400 $300 $200 $100-50% $0 01/05 03/05 05/05 07/05 /05 11/05 01/06 03/06 05/06 07/06 /06 11/06 01/07 03/07 05/07 07/07 /07 11/07 01/08 03/08 05/08 07/08 /08 11/08 01/ 03/ 05/ Volatility: D/TKR_CHINA BDA Dirty Tanker China Volatility: B/C CHINA Volatility: D/TKR_SUBCON BDA Dirty Tanker Subcontinent Volatility: B/C SUBCON 15

16 Volatility 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Volatility of the BDA index (Clean Tanker) based on the previous quotation BDA $800 $700 $600 $500 $400 $300 $200 $100-50% $0 01/05 03/05 05/05 07/05 /05 11/05 01/06 03/06 05/06 07/06 /06 11/06 01/07 03/07 05/07 07/07 /07 11/07 01/08 03/08 05/08 07/08 /08 11/08 01/ 03/ 05/ Volatility: C/TK_CHINA BDA Clean Tanker China Volatility: C/TKR_SUBCON BDA Clean Tanker Subcontinent 16

17 DEMOLITION STATISTICS FOR 20 number dwt ldt number dwt ldt TEU DRY BULK Average age: 30,51 CONTAINER SHIP Average age: 27,59 < 19,999 dwt < 999 TEU ,000 59,999 dwt ,000 2,499 TEU ,288 60,000 79,999 dwt ,500 4,499 TEU ,201 > 80,000 dwt > 4,500 TEU Total Total TANKER Average age: 27,31 REEFER Average age: 27,39 < 29,999 dwt Total ,000 44,999 dwt ,000 59,999 dwt GENERAL CARGO, MPP Average age: 31,81 60,000 74,999 dwt Total , ,999 dwt , ,999 dwt RORO Average age: 28,85 > 150,000 dwt Total Total PASSENGER Average age: 41,18 COMBINATION Average age: 27,39 Total Total MISCELLANEOUS Average age: / Total NUMBER DWT LDT TEU AVERAGE AGE GRAND TOTAL ,50 These statistics include ships sold for demolition and effectively beached. Average age reflects the average age of the ship type at the date of sale for demolition. 17

18 ldt Quantity of Lightweight beached in 20 number Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Bangladesh ldt India ldt Pakistan ldt China ldt Bangladesh Number India Number Pakistan Number China Number 18

19 Pakistan % Distribution of leightweight (20) China % Bangladesh % India % The information contained in this report has been obtained from various market sources. Eckhardt Marine GmbH believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Eckhardt Marine GmbH will not be held responsible for any action or failure to take action upon reliance on information contained in this report. Whilst every care has been taken in the production of this review, no liability can be accepted for any loss incurred in any way whatsoever by any person who may seek to rely on the comments contained herein. 19