A week fraught with falls and the further repercussions ahead was only lifted by some positive signs of a Bangladesh reopening and by China's continued resurgence. As the Indian market was left reeling in the wake of falls of at least USD 30 per tonne over the last few weeks, Pakistan too continued to adjust their levels correspondingly. As a result, the industry started to witness an altogether new reality on prices much earlier than the original post budget scenario envisaged by many.
The fact is that almost 40 vessels have been arriving India every month for the past few months, but with only around 20 open buyers able to take those vessels. A huge surplus has thus built up as supply has continued to outstrip demand subsequently placing a crumbling downward pressure on local prices. As the Bangladesh market still lies dormant in its ability to take on new tonnage and with Pakistan struggling to take on anything but their preferred units (usually large LDT tankers and bulkers), India has been the market in focus for the best part of a year now.
It may be incorrect to label exhaustion as a possible reason for the corrections of late, but certainly, it is now time for the other markets to pick up the slack something Chinese buyers have proved more than able to do with some of the top offers on the table for the past few weeks. With still plenty of cash buyer tonnage as is and delivered swamping the market, it may yet be some time before new candidates are welcomed with the same vigor and enthusiasm as at the start of the year.
Certainly, India needs time to digest the huge number of vessels already taken (along with those waiting) before building up an appetite to begin the process of bidding big once again. How long that will be is uncertain, although a Bangladesh reopening right now would go some way to stepping into those shoes.
Sales continued this week as well and it appears the recently sold aircraft carrier HMS INVINCIBLE (16,256 LDT) has been sold to Turkey for USD 200/LT LDT basis as is UK.
Source:
Steel Guru (Sourced from GMS Weekly). Tuesday, 15 Feb 2011
No comments:
Post a Comment