With the local recycling industry now receiving its green light to import vessels once again, many would have expected the floodgates to open and the deals to start piling up.
However, the reality is that almost no end buyers are willing to commit on new vessels whilst the pending issue over the 5% import tax remains unresolved. The BSBA are pushing for a reduction in the rate, down to 0.5%, in order to counter the excessive 5%, which could see prices fall by as much as USD 25/LT LDT.
As a result very few deals were concluded this week and those deals fixed by hasty cash buyers last week upon premature news of the market opening, began to face problems (the panamax bulker HU JIANG failed with the buyers failing to lodge the deposit).
It may be several more weeks before the looming tax issue is resolved, and until that time, we are most unlikely to see any bullish levels despite improving steel prices, stabilization of the local currency (Bangladeshi Taka to United States Dollars has been taking a beating as well), and a rising demand.
Source: Steel Guru (Sourced from GMS Weekly). 17 Jan 2012http://www.steelguru.com/indian_news/GMS_weekly_report_on_Bangladesh_ship_breaking_industry_for_week_02_2012/245834.html