India lurched deeper into crisis this week with literally no end buying taking place, despite plenty of candidates being thrust into the market and cash buyers still carrying a number of imsold units / pending local resales.
Indeed, the Indian rupee further weakened against the dollar, which has been the root cause of concern, since the currency crisis of the fourth quarter of last year, which saw the rupee reach its lowest levels ever, against the dollar.
There is also the impending monsoon season on the horizon (resulting in a slowdown of cutting activity) and an overall shortage of labor (due to the seasonal migration of local workers back to their hometowns, at this time of year).
Clear evidence of the diminishing local activity is highlighted via a reduction in the volume of arrivals at local anchorage. From the highs of over 300,000 LDT to barely 140,000 LDT is at local anchorage this week.
While Indian recyclers have indeed absorbed an extraordinary amount of tonnage during the early part of the year, the current slump has left an extreme crisis of confidence in the market, especially from cash buyers who have taken one too many hits on recent deliveries.
Any imminent recovery is going to be a slightly sorry affair, with many already being badly bitten over the last 6 months or so
Source: Steel Guru. 7 May 2012http://www.steelguru.com/indian_news/GMS_weekly_report_on_Indian_ship_breaking_industry_for_WEEK_18_2012/262629.html