18 August 2013

GMS weekly report on ship breaking industry for WEEK 32 of 2013:

As the saga concerning the mooted demolition sale of the 8 enbloc VLCCs with Iranian links rumbles on, the market continued to struggle in terms of demand and drastically volatile local fundamentals.

Eid holidays have hardly helped in assisting local deliveries and concluding onward sales/new business, but it has proved to be an incredibly testing month in terms of local steel plate prices and currency.

Both India and Pakistan have suffered dramatic currency misfortunes this week as the Rupee in both countries depreciated to record lows against the US Dollar. Talks of government intervention in India to halt the slide have so far proved futile and many end users are apoplectic at the prospect of further losses, in what has been a disastrous quarter for them.

Steel prices also suffered reversals in all Indian sub-continent locations as an Eid lull descended across the industry, with many hoping for brighter times ahead. With China hot on the heels of the competition, any further falls could see the sub-continent markets deprived of their share of (Far-East) tonnage they have so far been enjoying this year.

Unhelpful to the cause of restoring confidence and sentiment in the industry was the sale and circulation of the aforementioned Iranian linked VLCCs at bargain levels. Talks of units being sold BELOW USD 400/LT LDT on WET units merely served to harden the resolve of end users to purchase all vessels at these vastly reduced numbers.

So, the ongoing drama is not only calling into question U.S. and international sanctions, but is also affecting the bottom line of ship owners and cash buyers the world over as demo markets sag under the pressure of these cut price headaches!

For week 32 of 2013, GMS demo rankings for the week are as below:

Market Sentiment
USD 375/lt ldt
USD 410/lt ldt
USD 375/lt ldt
USD 410/lt ldt
USD 375/lt ldt
USD 410/lt ldt
USD 340/lt ldt
USD 350/lt ldt

Source: Steel Guru. 13 August 2013

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