14 November 2013

GMS weekly report on ship breaking industry for WEEK 44 of 2013:

With plenty of candidates of all types and sizes still in the market, it was surprising to see only one market sale concluded this week - into Bangladesh. Diwali holidays in India have slowed the pace somewhat, but cash buyers have still been alive to possibilities and have taken positions on units where necessary.

It should therefore be a busy last few months to the year, with an uninterrupted run in all the major ship-recycling destinations up until Christmas. Many vessels are also approaching surveys in the New Year and with charter rates (on the whole) largely not justifying the costs to pass, the third quarter of (relative) inactivity may soon be forgotten.

Demand and capacity into all destinations remains strong, but fundamentals continue to fluctuate on a dailv basis. With the extreme volatility so far seen, end buyers can easily become nervous from one day to the next and (swiftly) withdraw previous offers.

Currencies in Pakistan and India have been the major cause for concern throughout this year with the Indian Rupee finallv making a recovery during October and Pakistan starting to level off a touch. Yet fears persist in both countries of another depreciation of currencies. Coupled with the ever-volatile steel prices, local buyers have had a frayed last few quarters.

Bangladesh steel prices have recovered to such a degree that some impressive levels are once again emerging albeit for the right units and a local buyer is interested to bid. Where they are missing out however, is on their favored VLCCs, which are largely being delivered gas free for man entry only (thus ruling them out with the Chittagong hot works requirements).

Despite Chinese levels remaining subdued, the knowledge that yards will need to be filled to satisfy quotas and renew licenses may see levels make something of a recovery towards the end of this year.

Market Sentiment
TANKER Prices 
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. 13 November 2013

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