21 February 2012

GMS weekly report on shipbreaking industry for WEEK 07 of 2012:

The stark realization that there were more vessels in the market than open buyers began to hit home this week as a slowing of the supply finally gave cash buyers a chance to catch their breath and deliver already concluded vessels to end buyers.

Yet, a number of vessels remain unsold as Buyers are now able to pick and choose from a vast array and at levels suitable to them. If Sellers are too demanding on the price, then buyers are more than happy to turn their attentions to other favorably-priced units available part of the problem is that Bangladesh is not quite up to standard in terms of satisfying the supply. The market there is still very delicate when it comes to prompt and timely deliveries. Indeed many cash buyers are choosing to ignore this market altogether and perhaps with good reason.

The shortage of US dollars in the country and reluctance of banks to even loan money means that standard deliveries in Chittagong have become a thing of the past. Cooperation and patience from both parties is key and a majority of cash buyers have decided to focus their energies elsewhere, rather than rely on a market currently mired in difficulty.

Elsewhere there was, what many consider to be, a temporary pickup in price in India (with Pakistan following closely on their heels), especially with the March 15th 2012 budget approaching and prompt deliveries very much favored.

China, although correcting by some USD 20-30/LT LDT down in recent weeks, displayed signs of stability with some resilience on the price. Many yards however remain full and capacity has very much started to dwindle.

For week 07 of 2012, GMS demo rankings for the week are as below:

CountryMarket SentimentGen Cargo PricesTanker Prices
IndiaWeakUSD 470/lt ldtUSD 500/lt ldt
PakistanWeakUSD 465/lt ldtUSD 495/lt ldt
BangladeshWeakUSD 460/lt ldtUSD 490/lt ldt
ChinaWeakUSD410/ltldtUSD 430/lt ldt

Source: Steel Guru (Sourced from GMS Weekly). 21February 2012

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