A downturn in steel prices this week left many of those speculative deals of the past fortnight in trouble as vessels continued to arrive unsold and various cash buyers had no other choice but to beach on their own (or affiliate) plots for a significant loss.
The Danaos container LOTUS was (reportedly) one such case in point, having been sold at an unthinkable USD 454/LT LDT several weeks back.
There was also talk of a number of deals failing. Having been bought well above market initiallv, leaving unscrupulous cash buyers no other choice but to take the hit or walk away from the deal. Another example were the several Turkish owned bulkers that came back onto the market, having been oversold recently.
The conundrum of the dual market (prices offered by local buyers vs. cash buyers) as discussed in these very pages only last week, only works if the market comes up to meet those bold cash buyers who are buying ahead of reality, gambling on an upswing in prices. If levels do not move in the direction those cash buyers had hoped for, then deals start to unravel very quickly as we have seen this week - much to the annoyance of owners who had put their faith in the strong numbers on show.
The Rupee spent another encouraging week trading in the 61s to the US dollar, and for the first time in almost half a year, it could be said that a certain stability is emerging with the currency locally.
Source: steel guru. 29 October 2013