20 July 2011

GMS weekly report on shipbreaking industry for WEEK 28 0f 2011:

With a market recovery well under way in India, cash buyers across the board started to get carried away as prices were being driven up to some spectacular numbers off the back of sheer speculation, primarily by only one or two key players.

The reality though is far from comforting for those who have secured high profile units at such levels with Bangladesh being closed again, Pakistan worryingly off the pace, and India as ever highly volatile. With bulkers going for tanker prices and several tankers under negotiation at levels way above market numbers, questions marks had to be raised as to the wisdom behind this particularly wild speculation.

Several units have been fixed with a Bangladesh option (most likely to be declared before the end of the month), yet if the market there does not open, there wall either be some very unhappy owners or some very damaged cash buyers.

If the market continues to improve nearer to the time of delivery, then some of the deals done this week wall be viewed as smart moves, but given the ever volatile nature of the Indian market, these are risky moves indeed (especially given the level of the fixtures).

Whilst India surged ahead then, Bangladesh remained closed and Pakistan stayed stranded some USD 20 per tonne behind their local rivals. The market remained firm in China though with several large dry units finding buyers in both North and South amidst reports that the market there was on the slide.

For week 28 of 2011, GMS demo rankings for the week are as below

Market Sentiment
Gen Cargo Prices
Tanker Prices
USD 500/lt ldt
USD 525/lt ldt
USD 480/lt ldt
USD 505/lt ldt
USD 450/lt ldt
USD 465/lt ldt

Source: Steel Guru (Sourced from GMS Weekly). 19 July 2011

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