14 May 2013

GMS weekly report on ship breaking industry for WEEK 19 of 2013:

Few cash buyers have begun to adjust their offers in anticipation of any slowdown due to upcoming budgets or monsoon season. Indeed, the competition remains as fierce as ever, with some truly big numbers seen across the board on a whole variety of tonnage both 'as is' and delivered.

That sentiment did not seem to be entirely reflected on the ground, with many vessels still arriving unsold. There are whispers of renegotiations and failed deals emanating from the shorefront as well, for the most frivolous of reasons. Very few in the industry expect current prices to hold, vet most buyers are failing to heed the warning signs and take a step back from the buying to offer at the lower levels expected. Consequently, if levels do soften significantly, there may well be some painful deliveries ahead.

Pakistan and Bangladesh have begun to lose focus due to elections and ongoing political turmoil in both countries, not to mention the budgets of June 10th and June 6th respectively, which many are speculating could bring in some prohibitive import taxes of up to 5% on new purchases. Cash buyers continue to fork out some truly speculative numbers for India vet the reality is that steel prices have come off again this week and the rupee has depreciated by 1%, to finish the week trading at a worrying 54.S0 to the US Dollar.

The sentiment across the sub continent has become understandably subdued and muted in recent weeks as a result, with many end buyers simply choosing not to offer preferring to be in wait and watch mode until after budgets are announced. Manv are also not keen to stock their yards over monsoon season due to the difficulties associated with cutting.

With the Chinese market still out of the game, it is set to be a nervy month or so ahead, with many hoping current levels can sustain to successfully see out upcoming deliveries. Finally, we can expect at least one vessel heading to the shores of Turkey as the 7,406 LDT ALGOMA PROVIDER was concluded for USD 117/LT LDT under-tow, basis "as is" Montreal.

For week 19 of 2013, GMS demo rankings for the week are as below:

Market Sentiment
USD 410/lt ldt
USD 440/lt ldt
USD 405/lt ldt
USD 435/lt ldt
USD 405/lt ldt
USD 430/lt ldt
USD 350/lt ldt
USD 360/lt ldt

Source: Steel Guru. 14 May 2013

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