GMS weekly report on shipbreaking industry for WEEK 40 of 2011:

Highlights:

• Reluctance to offer
• Playing hardball
• Chance for cheap one!?
• Tremendous pressure

Jittered and Confused:

The Ship Recycling industry continues to display its fair share of confusion and jitters as the first week of October wrapped up. On the one hand, a number of speculatively (high) priced deals were concluded for the week with question marks looming over these deals and their relation to the current reality (on pricing) emanating from most end buyers.

On the other hand, local markets continued their jittered performance as a persistent reluctance and hesitation, on the part of the end buyers to commit at these high prices, remained evident amongst the four major markets. Evidence of this fact was how a number of vessels were left stranded, either as Cash Buyers were unable to find end buyers at the appropriate prices or the units were simply not receiving any interest from end buyers who were content to bide their time before concluding once again.

The Chinese market at least had the excuse of being away on October National holidays but the Indian sub continent markets continued to face difficulties for a third consecutive week as end buyers played hardball and many of the vessels arriving local anchorages faced greater scrutiny and prospects for renegotiation.

Several canny yards have begun to sense the chance for a quick and easy deal from distressed cash buyers desperate owners and with impending beaching tides and time running out on the Bangladesh extension of October 12th 2011, the present poses tremendous pressure for cash buyers desperate to hold their own.

Delays at the time of delivery have almost become expected in recent months due to local financial banking problems and the tendency of end buyers losing on deals continue to look for increasingly innovative ways to knock money off their previously high priced deals.

For week 40 of 2011, GMS demo rankings for the week are as below:

Country	Market Sentiment	Gen Cargo Prices	Tanker Prices
India	Weak	USD 495/lt ldt	USD 525/lt ldt
Bangladesh	Weak	USD 495/lt ldt	USD 525/lt ldt
Pakistan	Cautious	USD 490/lt ldt	USD 520/lt ldt
China	Unstable	USD 430/lt ldt	USD 450/lt ldt

Source: Steel Guru (Sourced from GMS Weekly) 11 October 2011

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