GMS weekly report on ship breaking industry for WEEK 52 of 2010

With the holiday season in full swing and most in the shipping community having diverted their attentions towards more important issues, such as spending time with family, friends and loved ones, the recycling industry went through a bit of a slow spell this week as compared to recent weeks.

Moreover, as the year gradually approaches an end, the marginal performance from this week is expected to continue until January comes around.

Meanwhile, the status of the markets remains relatively unchanged. Bangladesh remains (and is expected to be) out of the scene well into January, India leads the pricing chart and the biggest buyer of vessels, Pakistan remains marginally behind with wet prices and lastly China getting closer to picking up units in light of their recently improving levels.

Supply is expected to remain strong in the immediate future and as prices continue to hold, January could well see SNP activity improving as buyers return to the bidding tables.

Bangladesh ship breaking industry for WEEK 52:

The Bangladeshi ship recycling industry continues to struggle with its self-imposed environmental requirements and the subsequent forced shut down of the local market.

After the latest development last week whereby the Bangladeshi High Court, has –

(a) Ordered local authorities to cease issuing fresh NOCs and

(b) Instructed the local Government to form an expert committee that would be responsible to inspect incoming vessels for hazardous materials onboard and there has understandably been no fresh sales into the local market.

Moreover, since the High Court has established a 30 day window for the local Government to form the said committee, local ship breakers are expected to remain absent from negotiations, well into January.

India ship breaking industry for WEEK 52:

Even though SNP activity reduced marginally this week as most in the shipping community were gearing up for Christmas celebrations Indian Buyers were still at the forefront of market negotiations, eagerly bidding for available tonnage. As a result the few vessels being worked this week fetched some rather strong and surprising levels.

Tweendecker M/V FLORA and Reefer M/V SPRING TIGER both fetched levels that were slightly outside the realm of just how much these types of vessels are presently fetching at USD 468 per tonne and USD 462 per tonne respectively.

While a marginal improvement in local fundamentals could well be the reason behind the firming prices, speculative offers/levels from Cash Buyers has been the modus operandi for a good bit of the present year and also explain the stronger numbers behind the fixtures.

Meanwhile, as China prices continue to improve and a good bit of the available tonnage is discharging in Chinese waters, some owners may not see the additional S20/Ton as a large enough benefit in sailing towards the sub-continent. Additionally, as Pakistan continues to trail a few paces behind for the wet tonnage, Indian Buyers do have their work cut out for them when January comes around.

Source: Steel Guru. Tuesday, 28 Dec 2010

http://www.steelguru.com/international_news/GMS_weekly_report_on_ship_breaking_industry_for_WEEK_52/183068.html

http://www.steelguru.com/indian_news/GMS_weekly_report_on_Bangladesh_ship_breaking_industry_for_WEEK_52/182968.html

http://www.steelguru.com/indian_news/GMS_weekly_report_on_India_ship_breaking_industry_for_WEEK_52/182961.html