23 August 2011

GMS weekly report on ShipBreaking industry for WEEK 33 of 2011:

Precarious Time!


  • Extreme volatility remains
  • New sales needed to benchmark levels
  • Fundamentals remain strong
  • India Bangladesh pricing in close proximity
Extreme volatility across international financial markets continued to beset the recycling industry with another week of confusion and a reticence in offering that has continued to affect new acquisitions and re sales.

Prices have come off by about USD 30/lt ldt since last month and there is a general prevailing caution to commit to new units in any of the markets as fears of further falls are still expected to come forth. It may be that several market sales are needed in order to benchmark new levels and set the reality for future business.

Despite the continued market turmoil for the week, local steel plate prices (especially in India) have shown a degree of stability even though a drop in demand over the Monsoon months and Ramadan was expected to have taken its toll on levels. However, once September arrives, the end of the monsoon season could possibly mark a resurgence of demand and it could be back to business as usual until the end of the year. Time will tell.

Meanwhile, levels from India and Bangladesh are now neck-to-neck. The main difference between the two markets is the number of willing and available Buyers (in India) that outweighs those from Bangladesh (and even from Pakistan for that matter). On the other side, while competition prevails from China, however given that levels are still a distant USD 50 per tonne away, their competitiveness could be more with a one off sail rather than the norm.

For week 33 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 495/lt ldt
USD 520/lt ldt
USD 485/lt ldt
USD 510/11 ldt
USD 450/lt ldt
USD 465/lt ldt

Source: Sourced from GMS Weekly. 23 August 2011

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