29 October 2013

GMS weekly report on ship breaking industry for WEEK 43 of 2013:

For the second consecutive week, news of a VLCC sale at impressive levels reverberated around the industry. It appears that Pakistan is the market player when it comes to such units - even if the vessels are positioned in the Far East due to their low inward clearance expenses, no beaching tide requirements, and capacity to take tankers gas free for man entry onlv, as compared to the hot works requirements of both India and Bangladesh.

Just as India geared up for Diwali, both Pakistan and Bangladesh emerged from Eid holidays, somewhat invigorated, but not sufficiently, so as to bring about a major improvement in price that many cash buyers had been gambling on. For this reason, tales of failing deals once again began to emanate in the market, particularly for those vessels purchased in recent weeks at levels entirely apart from the local realities. Indeed, many cash buyers have begun to pay for their excessive enthusiasm with deals, reputations, and money all lost - a cautionarv tale for owners simply chasing the top dollar.

Whilst demand and enquiries are emerging once again in Pakistan and Bangladesh particularly for the larger units on offer prices have yet to jump up significantly. Cash buyers are discussing a number of their 'as is' units, yet end buyers seem reluctant to meet asking prices so far. With India out of action during Diwali holidays, it will be interesting to see how both markets respond and take on the burden of securing market tonnage.

After an impressive showing throughout October on both steel prices and the currency, it was a disappointing week overall in India where levels began to tail off in the buildup to holidavs, largely through a weakening of steel prices bv as much as USD 10-I5/LT L.DT. China likewise remained static as domestic steel plate prices continued to stutter. Finally, the Turkish market continued its upswing with the purchase of the small LPG vessel HAPPY HARRIER (2,159 LDT) for a firm USD 470/LT LDT (with about 26 Tons of 9% Nickel Steel in the tanks, being the reason for the premium).

For week 43 of 2013, GMS demo rankings for the week are as below:

Market Sentiment
USD 390/lt ldt
USD 420/lt ldt
USD 385/lt ldt
USD 420/lt ldt
USD 385/lt ldt
USD 420/lt ldt
USD 330/lt ldt
USD 340/lt ldt

Source: steel guru. 29 October 2013

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