04 October 2011

GMS weekly report on ShipBreaking industry for WEEK 39 for 2011:

Highlights:
  • Sentiment continues to wither
  • End buyers nervous to offer
  • Prices fall upwards of USD 20/Ton
  • Local buyers

Churning Throughout the Crumbles:

Currency crisis, falling steel scrap and non-ferrous prices, debt fears, and banking delays, have all come together over the past few weeks to leave the recycling markets across the board in a heightened state of confusion.

Additionally, while not directly related, the fears of a further weakening of both US and European markets has led to an overall decline in market confidence of late. As a result, the recycling industry has witnessed a drop, upwards of USD 20/LT LDT, with many end buyers even fearing to present offers on new units, having reservations that perhaps the market could have come off further in the upcoming days.

Whilst such volatility is not new to India, to see China and Bangladesh eagerly turning their noses up at vessels priced about USD 20 per tonne below the peaks of last week was an eye-opener to industry veterans. Especially in China, where local yards have been deprived of units over the recent past, in light of the stronger levels from the sub continent.

Meanwhile, delays in Bangladesh have become far too much of a worrying reality as several vessels from the last tide still remain waiting to beach as end buyers have yet to release (or in some cases even open) respective letters of credit.

As such, the present does appear to be troubling times then for cash buyers who need to balance the ongoing delays with the demands and (mainly price) expectations of owners, while at the same time, tactfully deal with end buyers in a falling market, who are keen to adjust (downwards) the prices on their incoming inventory. As the tonnage keeps coming, the challenges keep rising.

For week 39 of 2011, GMS demo rankings for the week are as below:

Country
Market Sentiment
Gen Cargo Prices
Tanker Prices
India
Unstable
USD 500/lt ldt
USD 525/lt ldt
Bangladesh
Weak
USD 500/lt ldt
USD 525/lt ldt
Pakistan
Cautious
USD 490/lt ldt
USD 515/11 ldt
China
Unstable
USD 430/lt ldt
USD 450/lt ldt

Source: Steel Guru (Sourced from GMS Weekly). 04 October 2011

1 comment:

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