13 July 2013

GMS weekly report on shipbreaking industry for WEEK 28 of 2013:

A jarring last few weeks in India has filtered through to competing markets in the subcontinent, to present a much weaker and fragile summer sentiment across the board. One of the early indicators for the lull currently being endured may have been the Chinese market, which has been in the doldrums for some months already with Chinese end buyers struggling to compete and even shift any of the inventory from their yards.
As such, lower overall levels from China of late, have seemingly become key indicators for an impending malaise elsewhere. For their part so far, considering the overall dithered sentiment, markets across the Indian sub-continent have managed to hold up comparatively well, staving about USD 100/LT LDT ahead of their Chinese competition.
However, is a further fall still coming the way of the markets in the sub-continent remains to be seen.
As week 27 ended, there emerged signs of life in Bangladesh as more enquiries started to emerge for the right tonnage, albeit at far more subdued levels than before. The facts are that prices have come off by at least USD 25/LT LDT, with most standard dry vessels selling well below USD 400/LT LDT, and wet vessels/containers fetching into the low USD 400s/LT LDT, not only in Bangladesh, but also across the sub-continent overall.
The Indian Rupee has remained one of the chief culprits for the current slide, with an unprecedented and historical level of excess INR 60 to the US Dollar, witnessed for a greater part of the last few weeks.
Due to the fluctuations alone, nearly 15% has been lost from end buyer inventories secured in 2013 so far, as many end buyers are either in panic mode, or simply refusing to offer on any tonnage, until a greater semblance of stability is seen.
With budgets having long passed in both Pakistan and Bangladesh and no positive reaction seen thus far, this new reality on levels appears to be set to last for the summer, until the arrival of the next upward swing - possibly in the 4th quarter of the year?
For week 27 of 2013, GMS demo rankings for the week are as below:
Market Sentiment
USD 390/ltldt
USD 420/ltldt
USD 390/ltldt
USD 420/ltldt
USD 385/ltldt
USD 415/ltldt
USD 310/ltldt
USD 320/ltldt
Source: steel guru. 11 July 2013

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