Dry Bulk demolition price rises as secondhand prices fall

The steady rise in the demolition price ($/ldt) over the past 26 months is in stark contrast to the fall in secondhand prices which first started to decline for Capes around the middle of last year with Panamax and Supramax stating a couple of months later. Inevitably as the assessed values of these two come closer together shipowners will question their own strategy with older ships coming, naturally, under the most scrutiny. Currently, and for a Panamax, the assessed scrap value is around $5.6m based on an $/ldt rate of $453.75 in China and $471 on the Indian sub-continent. The secondhand price for a five year old Panamax meanwhile has slipped from around $41m last June to $33m today. Inevitably older ships will command less on the market than the modern Panamax such that at the margin the current demo price is brushing the market price of 25+ year old ships. For Supramaxes the position is slightly different in that while demo prices have risen to $3.2-$3.3m equivalent there are not so many 25+ year old ships of that size trading as at that time the “market Handymax” was typically around 44-45,000 dwt. Nonetheless for their modern equivalent, the geared 52,000 dwt type, prices have fallen from around $32.70m in mid-November to $28.40m today. With shipowners able to consider the
Source: ICAP Shipping