16 October 2013

GMS weekly report on ship breaking industry for WEEK 41 of 2013:

A strange phenomenon emerged this week in the Indian sub- continent ship recvcling markets. Cash buyers seemingly created a market all of their own, far detached from the local realities and pricings of the markets on the ground.

Some truly exceptional numbers were seen on available tonnage and rumors began to spread through the ship owning communities on the sorts of prices available. Yet, mere was little substance to back up all of the hot talk. For all that cash buyers began competing amongst themselves, there was bemusement in local sub-continent markets as prices ascended to heights of USD 1O to USD 15/LT and (reportedly) even 20 USD/LT LDT away from what local plate prices and currencies could justify.

A lot of the fuss seemed to surround India and the noteworthy recovery it had made, both on the currency front and in terms of local steel plate prices (which appear to have settled somewhat). Having nearly touched the dreaded Rs. 70 against the U.S. Dollar last month, the currency is trading down at a far more respectable Rs. 61.07 at the close of the week, to hearten many end buyers who had started to fear for their very livelihoods only one month before.

However, there was simply no justifying cash buyer acquisition at or above the 450/LT LDT mark on containers and tankers. It is a highly speculative position to take by certain buyers, especially given the volatility experienced in all markets so far this year. Should prices not perform as hoped for, expect the games to begin on the shorefront. The fact that both Pakistan and Bangladesh will be off on Eid holidays from next week makes such speculation even stranger

China finally emerged from the National October holidays in a weaker position, with few (if any) new purchases to mention, given the growing gap between the sub-continent markets. Their hand will have to strengthen if they are to maintain their market share in this last quarter of 2013.

For week 41 of 2013, GMS demo rankings for the week are as below:

Market Sentiment
CARGO Prices
USD 395/lt ldt
USD 425/lt ldt
USD 390/ltldt
USD 420/ltldt
USD 385/lt ldt
USD 415/lt ldt
USD 340/lt ldt
USD 350/lt ldt

Source: GMS Weekly. 15 October 2013

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