Unfortunately, for many cash buyers, some crucial buying this week was met with a decidedly indecisive set of market conditions.
The looming hearing on July 19th 2012 in India to formalize (or not) the Supreme Court directive, restricting the import of ships containing toxic or hazardous materials (as per the Basel Convention) into India, has left the buying somewhat in limbo this week.
The frustration is that the market was beginning to show some signs of life again after dealing with falls of over USD 100/LT LDT. The currency in India had started to settle at region INR 55 to the US Dollar again and there were some encouraging gains on the scrap steel front as well. Capacity and aggression to buy was back up again - particularly into India that has experienced a comparative dearth of sales candidates of late.
For many, it feels like a case of one step forward and two steps back, as rather than having a fully fit and functioning Indian market back on the positive scene to buy once again, we could be faced with having no market at all.
What needs to be understood and discussed, is what exactly the Indian Supreme Court is looking to outline with this new legislation. Hazardous materials inventories already exist for all vessels coming into Alang (and have been for some time now in acquiescence with the Hong Kong convention), but if owners are actually going to be required to remove these items, then we move into very tricky territory indeed.
All eyes will be focused on the hearing of the 19th then, to see what exactly is decided. Li the meantime, though prices have started to pick up across the board, with some speculative moves made in Bangladesh, some VLCCs acquired in Pakistan and some steady buying for another week in China.
Source: steel guru. 17 July 2012