Johann Meyer (CSM): Scrap prices will continue to rise (source CSM)
Cash buyers of vessels for recycling in Asia report the price of scrap metal in India and Pakistan is on the rise as recycling yards look to restock
A revival in demand for tonnage at Indian ship recycling yards has lifted the prices on offer for scrap tonnage, even though the Indian rupee is weakening against the US dollar, report cash buyers in the region.
GMS (Dubai) reported, “…rampant Pakistani and Indian markets continue to pay the most impressive numbers close to (and even above) US$/ldt (in some cases),” in its weekly report.
Tankers have reached a recent high of US$/ldt in India but by contrast, demand and prices have dwindled in Turkey.
Looking further ahead, the ship recycling industry will play a major role in decarbonisation in removing vessels that are unable to meet emissions criteria.
But it is a question of when, noted the offshore, energy, green fuel, recycling and waste disposal specialist company CSM Energy, part of the Columbia Group of companies.
CSM Energy managing director Johann Meyer noted there will be a process, “Development of the recycling industry in this respect will depend on the potential middle phase of carbon-neutral fuels which would mean a slight increase in activity. The ultimate change to zero-carbon tonnage will force a major increase in recycling activity and this will, most probably, be close to the lifecycle end of the newbuilding orders using carbon fuels,” he said.
“Scrap prices will continue to rise this year but become stable at a higher level throughout the year,” he added. “This all depends on the market and the political situation. Container rates are still flying high and owners are better off selling their tonnage or riding the wave of daily time charter rates. Whereas the tanker market is likely to pick up more, so owners will try to keep their tonnage or buy in cheaper units on a speculative basis,” he said.
Mr Meyer said the current regulations and conventions are building the foundation for the necessary changes in the shipbreaking market. “While environment, social and governance are the right additional tools to introduce, evaluate and thrust the important mindset change of the industry – it can only happen if companies are taking it with the required seriousness and not as a marketing campaign.”
