28 June 2011

GMS weekly report on shipbreaking industry for WEEK 25 of 2011:

With the decline across the international recycling markets still seeming like it would continue in the coming weeks, the temporary slowdown seemed to offer a brief opportunity for a few sales to take place this week. But with a continued (expected) fall in the coming weeks, we wonder what the upcoming deliveries would have had in store for cash buyers.

Whilst prices were never expected to dip below the USD 450/LT LDT mark, prices have still come off some USD 25-30/ton over the last couple of weeks and hits across the board have been felt for vessels being delivered post decline (many renegotiations are being reported at the waterfront).

Many cash buyers have therefore been presented with challenging situations in a declining market with many end users using every trick in the book (usually by over scrutinizing vessels and documents onboard down to the most miniscule of details, to look for discrepancies/angles out) in order to try and knock the price down. In scenarios such as these, the reputation of the cash buyer and their influence locally at being able to diffuse such squabbles, is becoming an invaluable part of the deal.

However, with the mooted closure in Bangladesh on the horizon (although rumors circulating this week suggest that this may not eventually occur) and monsoon season still left with some way to run, it may be that further falls are in order before the market settles at a discernable/stable level.

As such, the levels in the Indian sub continent remained as they were from last week with Bangladesh just about leading the way. The only market with any sort of downward tendency was the Chinese market as fears once again surfaced of a correction in sight.

For week 25 of 2011, GMS demo rankings for the week are as below:

Market Sentiment
USD 495/lt ldt
USD 520/lt ldt
USD 480/lt ldt
USD 475/lt ldt
USD 500/lt ldt
USD 440/lt ldt
USD 460/lt ldt

Source: Steel Guru (Sourced from GMS Weekly). Tuesday, 28 June 2011

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