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Where to Next for Demolition Activity?
Team Sea and Coast | 24/03/2020

In today’s market conditions, it may wise to remove some older tonnage, although there are still many market unknowns. In its latest weekly report, shipbroker Clarkson Platou Hellas said that ‘with each week bringing new port restrictions and regulations in response to the Covid-19 virus, we have now entered a period of the unknown, can vessels be allowed into certain ports and can deliveries/change of crew take place at specific anchorages. Many of these questions remain difficult to give a precise answer as each day brings about new changes. Pakistan has this week announced that all beaching and boarding of vessels at Gadani Ship recycling yards be suspended with immediate effect for a minimum period of four (4) weeks and thereafter pending a further order”.

 

Source: Clarksons

The shipbroker said that “all ship recyclers have been instructed to strictly comply with these latest orders. In India, meetings took place between varied Government and local officials in Alang whereby further restrictions have also been implied. Basically, the following new regulations have now been implied: 1. Any vessel arriving at Alang for recycling that departed from Last port ON OR BEFORE MARCH 13,2020 with foreign crew will be allowed subject to quarantine of 14 days at port of arrival at Alang. 2. Any Vessel arriving at Alang departed from Last port AFTER MARCH 13,2020 with foreign national crew will not be allowed to entry at Port of Bhavnagar / Alang. 3. Quarantine period of 14 days will commence once the vessel arrived at Bhavnagar inner anchorage 4. Any vessel arrived at Alang that departed from the Last port after February 15, 2020 and or from China, Iran, Italy South Korea, Japan, France, Germany & Spain with Indian or Foreign Crew will be placed into compulsory quarantine for 14 days from the date of arrival at Bhavnagar Inner Anchorage. Total 4 days from arrival to clearance and thereafter after beaching of vessel all crew will be held for More 10 Days to complete total 14 days quarantine period. The place, location and staying of all crew members under quarantine period will be at Alang and Sir T Hospital Bhavnagar under observation of a medical team”, it noted.

 

 

Meanwhile, “in relation to the market conditions, it is no surprise that there is a lack of activity, however, there remains interest from some buyers to acquire tonnage. Several capesize bulkers continue to be discussed in the arena, but confidence from the cash buyers may restrict numbers placed on the negotiating tables. The market is not flush of cash buyers, several are reportedly facing difficulties with cash flow positions, and there is certainly more strain on those cash buyers active in the current climate. With many ports adopting new restrictions, more Owners will seek the ‘as is’ deal to avoid the last voyage to the recycling destinations – therefore it will be on the shoulders of the cash buyer to carry the burden of how they would dispose of the unit at a later stage and whether further limitations come into effect”, Clarkson Platou Hellas concluded.

Source: GMS

In a separate weekly report this week, GMS added that “pandemonium has been sweeping across the globe this week, as an increasing number of ports worldwide have reported shut downs, quarantines on incoming crew are being imposed at those that are still open for operation, and recycling deliveries are being jeopardized – both for ships arriving Indian subcontinent locations and for many ‘as is’ recycling deals the world over. The virus has started to spread at a worrying pace throughout Europe and the U.S.A., just as cases in the Far East have reportedly start to spike up again. This has dented any confidence that was emerging, following a period of relative stability, where cases in China, Korea and other worst hit areas were beginning to decline. As such, it seems churlish to be talking of recycling rates and market sentiments where essentially, minimal interest or confidence remains on the market to buy any fresh tonnage or vessels that have failed or those that are still unsold in various Cash Buyer hands. As Pakistan and India close their doors on all foreign ships arriving (with India also cancelling all international flights), the reality is that subcontinent recycling locations will remain quiet as long as the Coronavirus crisis persists. Global Government efforts and the ongoing focus remains on fighting this virulent pandemic, and whilst shipping markets continue to struggle – this is certainly the least of the international communities’ concerns at present”, it concluded.

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