The market showed few signs of shifting this week as several vessel purchased at speculative numbers were resold locally at levels indicating remarkable losses being borne by the players at hand.
The Polembros controlled PARROS WARRIOR was purchased last week at USD 536 per LT LDT and after no takers reportedly even emerged at USD 520 per tonne or USD 518 per tonne the vessel was committed to end buyers at 515 per LT LDT.
This reflects the growing speculative tendency of cash buyers to pay over and above what the market may be offering on the day of the deal, in the anticipation that come delivery the market would have potentially finned up to justify the high price and turn the deal profitable.
The trends for the year seem to support that, but there are many now who feel we have reached the tipping point and that the market has no further room for improvement based on local demand, scrap steel and nonferrous prices, coupled with struggling currencies and a faltering world economies.
A lack of sales for the week was testament to stagnant movement locally and the unwillingness of Gadani buyers to jump and match up to cash buyer expectations.
Source: Steel Guru (Sourced from GMS Weekly). 19 October 2011