Ship recycling – firming steel prices lift rates

Following a lengthy spell earlier this year when virtually no ships were recycled, activity in the key demolition centres of Bangladesh, India, Pakistan and Turkey has bounced back and prices have regained much of their earlier losses. Firmer steel prices are underpinning a market in which a significant number of older vessels, notably cruise ships, are considered no longer to have a profitable future.

Major cruise lines have already sold older ships to EU-approved recycling yards in Turkey. Three vessels belonging to Royal Caribbean’s Spanish subsidiary, Pullmantur, now in liquidation, are being recycled at Aliağa. They are the 1987-built Sovereign, the 1990-built Horizon, and the 1991-built Monarch. Other cruise ship recycling transactions have also been concluded and more are in progress, according to sources.

According to figures from GMS Inc, the world’s largest cash buyer of end-of-life ships, Pakistan is leading the price recovery with container ships typically paid around USD 370 per light displacement ton (ldt), with USD 10 dollars less for tankers and another USD 20 less for bulk carriers. At the other end of the price scale, Turkish recycling facilities are typically paying around USD 215/ldt for container tonnage, USD 205 for tankers and USD 195 for bulk carriers.