27 August 2013

GMS weekly report on ship breaking industry for WEEK 34 of 2013:

As headlines hit across the world of an Indian Rupee in free-fall, panic set in across the ship recycling industry with end buyers back-trading on offers or withdrawing numbers entirely altogether.

While it has been a tempestuous past few months, this week topped all that has gone before. The Indian Rupee suffered its single largest one day depreciation in more than a decade, as a historical low of INR 65.54 against the US Dollar was breached. The rollercoaster did not end there as the week ended with the currency back down at INR 63.41.

Chaos ensued on the waterfront with all concerned expecting another major correction in ship prices. Pakistan as they so often do followed suit, as their currency also suffered worrying and unprecedented reversals against the US Dollar.

Bangladesh similarly suffered hefty drop in levels, albeit in local steel plate prices, one that has seen almost USD 25/LT LDT knocked off the values of ships in little over a month. Local buyers have rallied together in protest, ceasing resale of ship's steel into the domestic steel market at least until August 30th, until some sort of upswing on the prices is seen.

For a brief time, there was a deathly silence across the industry with end buyers reluctant to open their mouths on offers, as rumors swept through on deals being negotiated (or renegotiated) at rock bottom levels.

The truth is that very few Sellers are willing to do deals at today's levels. Even cash buyers are holding on to hopes of better days. The end of monsoon season is just around the corner, Ramadan, Eid and all the resulting holidays have been and gone, and there is traditionally much more optimism going into an often bullish fourth quarter of the year - unfortunately reality is a far cry from the traditional August up-swing.

If the China market is anything to go by and it usually is a chief indicator of tilings to come - then some hope of recovery may be on the horizon. Those in the industry can only hope that the darkest days of this year are over.

For week 34 of 2013, GMS demo rankings for the week are as below:

Market Sentiment
USD 365/lt ldt
USD 400/lt ldt
USD 365/ltldt
USD 400/ltldt
USD 360/lt ldt
USD 390/Lt ldt
USD 340/lt ldt
USD 350/lt ldt

Source: steel guru. 27 August 2013

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