13 March 2012

GMS report on shipbreaking industry for WEEK 10 of 2012:

A number of candidates remained in the market and open for sale, yet with many buyers unwilling to bite at prevailing levels and unrealistic demands from Sellers, the number of actual deals concluded started to dry up.

With many cash buyers still holding unsold inventory and struggling to breakeven for the most part, the temporary break in new deals being concluded may come as something of a relief and a chance to regroup and re evaluate. It has been a breathless start to the year with the first two months seeing well over 300 deals concluded to the differing locations. With such a heavy supply of vessels, it has proved to be difficult for cash buyers to match those units purchased, to prevailing demand.

Indeed, with such a huge variety of vessels to choose from, end buyers have been able to dictate their levels and terms and have been well prepared to walk away from units if a deal has not been making sense and the levels too high on offer.

It has thus become a Buyer's market and the usually speculative cash buyers have had to adjust their tactics to matching vessels to available market demand end buyers in order not to leave themselves exposed at the time of delivery resale.

Prices across the sub continent remained stagnant for another week and it was the Chinese market that really pushed on closing the gap with their competitors to less than USD 30/LT LDT on occasions. The budget is proving to be a crucial date for India, Pakistan and Bangladesh, with all those markets nervously eyeing the outcome in order to position their future numbers accordingly.

Bangladesh was still proving to be a hugely frustrating market to affect deliveries with very little headway made over previous weeks to resolve timely deliveries. Many cash buyers have simply abandoned hope there with financing at a premium and administration overwhelming.

For week 10 of 2012, GMS demo rankings for the week are as below:

CountryMarket SentimentGEN CARGO PricesTANKER Prices
IndiaWeakUSD460/lt ldtUSD 490/ lt ldt
PakistanWeakUSD460/lt ldtUSD 490/ lt ldt
BangladeshWeakUSD450/lt ldtUSD 480/ lt ldt
ChinaBullishUSD420/lt ldtUSD 440/ lt ldt

Source: Steel Guru (Sourced from GMS Weekly). 13 March 2012

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