A Turkish-controlled tanker is said to have been sold for scrap in India at more than $1,000 per ldt.
The price is less eye-catching than it seems at first glance, considering surging demolition prices in general and the unique characteristics of the ship, market watchers said.
“If you think that it’s considered normal for a conventional tanker to be changing hands at $615 per ldt, then this particular deal isn't out of the ordinary,” one Piraeus-based market observer said.
Brokers reported that the 8,200-dwt Parsa (built 1991) has been sold for demolition in India at $1,060 per ldt, or about $3.3m in total.
Small chemical tankers of this type are known to be fetching higher prices because of their stainless-steel content. The Japanese-built Parsa reportedly contains 533 tonnes of the metal.
Managers with Turkey's Beykim Petrolculuk, the vessel's listed manager, did not respond to a request for comment.
The $1,060 per ldt reportedly achieved by the Parsa, however, is still remarkable.
According to VesselsValue data, this is the highest demolition price recorded across the entire shipping industry since the sale in February 2012 of the 13,100-dwt liquefied ethylene carrier Sigloo Star (built 1987), again in India, for $1,061 per ldt.
The $1,060-per-ldt fetched by the Parsa is in line with developments in the wider demolition market. Average scrapping prices for handysize tankers rose in August to $4.85m — its highest level since 2008, according to Clarksons.
“Scarcity of tonnage has ensured that prices remain firm on the prevailing high range,” analysts at Best Oasis, a cash buyer of ships for demolition, wrote in a weekly report.
“End-buyers are more inclined towards acquiring smaller tonnage as the frequent [coronavirus] lockdowns [in the Indian subcontinent] have lowered their risk appetite for the time being.”
While tanker owners are refraining from scrap sales as secondhand prices for old, large vessels remain high, boxship and bulker owners are holding onto their vintage assets due to strong earnings.
Still, tankers account for 50% of the 14.5m dwt in total shipping tonnage scrapped so far this year, according to Clarksons data. That is up from just 16% of total scrapped in all of 2020.
As iron ore prices declined recently, however, scrapping prices may fall with them.
“Market participants in India are skeptical that the current prevailing prices are too high to remain stable for a longer time,” Best Oasis noted.
