Indian sub continent buyers had been looking towards the results of the Indian budget this week with interest, fearing any great increase in import taxes could result in further falls in ship prices. The reality is that the budget passed without any overly dramatic tax increases (other titan an already anticipated 2% increase in excise duty), the results of which were a continuation of the status quo on current levels across the Indian sub cont.
Very few cash buyers were taking chances on Bangladesh, with prices differing by only some USD 25 to USD 30/LT LDT from China and waiting times double in Chittagong, there was little surprise in that, which likely contributed to the continued shoddy performance of the local market.
The number of vessels, although dwindling somewhat in recent weeks from the peak of January to February 2012 remained strong with a number of owners keen to sell given the right numbers.
The problem is that owner's expectations are currently miles away from a market under pressure from the sheer volume of vessels available. The recently dithered pricing might not reversr any time soon, especially with end buyers very much dictating the direction of prices, given the still abundant volume of tonnage.
Local fundamentals across the board actually remain relatively healthy with the recent currency crisis in the sub continent seemingly averted and steel prices continuing to impress. Whilst capacity should hold to absorb the market tonnage, the number of open and aggressive buyers with available finance is under question.
Indeed, with almost 60 vessels arriving into Alang alone in February 2012 and Bangladesh struggling to take delivery of under half that number of vessels since reopening at the start of the year, the pressure is beginning to fall very squarely on one or two markets to keep up the pace and perform as the tidal wave of tonnage persists.
For week 11 of 2012, GMS demo rankings for the week are as below:
|Country||Market Sentiment||GEN CARGO Prices||TANKER Prices|
|India||Weak||USD460/lt ldt||USD 490/lt ldt|
|Pakistan||Weak||USD460/lt ldt||USD 490/lt ldt|
|Bangladesh||Weak||USD450/lt ldt||USD 480/lt ldt|
|China||Bullish||USD415/lt ldt||USD 425/lt ldt|
Source: Steel Guru. (Sourced from GMS Weekly). 21 March 2012