27 December 2011

GMS weekly report on BANGLADESH shipbreaking industry for Week 51 of 2011:

As several tentative end buyers put forward numbers for the purchase of various vessels at anchorage this week, there was a distinct disappointment at their proposals, considering a sector that has been starved of tonnage for more than a couple of months now - especially considering the fact that the local steel place price improving has been gradually as well.

It is understandable that Bangladeshi buyers may be looking to peg their levels to the Indian market - but Chittagong buyers have not suffered the same currency crisis, as their Indian counterparts and the gloomy outlook on numbers seem unreasonable at this moment in time.

Titie, end buyers may be faced with a hefty 5% (approx USD 25/LT LDT) import tax on incoming vessels - but this has yet to be ratified or confirmed by the Government / High Court, who have still to approve and sign the extension that would allow vessels to beach once again.

With that in mind, it was a bold stride from one cash buyer to step forward and take the Bergesen controlled VLCC, BW STADT (41,079 LDT), in a move clearly separated from reality. The vessel was committed at USD 4S0/LT LDT basis 'as is' Labuan with about 700 Tons IFO ROB. Committing units (this could only feasibly be a Chittagong candidate) into a closed market, at levels wide of the mark, even on a delivered basis, has definitely caught many off guard this week.

Source: Steel Guru (Sourced from GMS Weekly). 27 December 2011

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