As levels started to slip below USD 400/LT LDT in the sub continent and below USD 300/LT LDT both in Turkey and China, alarm bells started ringing throughout the industry.
Buyers began to struggle with deliveries, owners started to temporize negotiations and end buyers overall, decided to temporize talks on new candidates until a new reality on levels became evident.
The currency has been the main source of discontent in India with levels approaching nearly record-historical lows of 57 against the US dollar, seen in a frantic week of trading which strangely saw some big gains in the international stock markets.
Certainly, a low for the year has been reached on the currency, and this has coincided with some significant reversals on the steel prices (as seems to be traditional at this time of year with the monsoon season underway).
As such, most end buyers are unable to shift the inventories in their yards leading to a stockpiling of unsold steel. There is even talk of some yards reportedly shutting down -simply unable to make ship recycling a viable business. It is understandably a tough moment throughout all markets at present, but this seems to be a yearly event and it may only be a matter of time, before prices are back up and business is booming once again.
In the meantime, there are sure to be some difficult deliveries and the pinch is likely to be felt right from owner to broker to cash buver to end user.
However, last year, far greater falls were seen and the market was back on its feet in no time. So as the summer months approach, owners will have to get used to a new reality on the levels as the first half of a booming and highly active year in the industry comes to a close.
The Turkish market, despite experiencing its own decline well below USD 300/LT LDT, reportedly had Norwegian built RoRo FILIPPOS (5,490 LDT) fetch a decent USD 302/LT.
For week 22 of 2013 GMS demo rankings for the week are as below:
GEN CARGO Prices
Source: steel guru. 4 June 2013http://www.steelguru.com/international_news/GMS_weekly_report_on_ship_breaking_industry_for_WEEK_22/314215.html