A tumultuous week ensued in India with the currency faltering to add to the concerns over deflated steel prices and a depreciating stock market. The Indian Rupee fell to a 6 month low of INR 61.9 during the worst period of trading, to startle many end buyers, who subsequently withdrew their offers and declined to initiate discussions on any new tonnage.
This has come as a complete shock to all, with many expecting the market to kick on after the Eid holidays and claw back much of the momentum lost to an inspired Pakistan market.
As a result, it was no surprise to see no new sales registered this week, with most new vessels (and those from existing cash buyer inventories) being diverted to Pakistan to exploit the demand and the prices on show there currently.
With Bangladesh set to resume buying once again as well, it may be a bleak few weeks in the Indian market until prices and fundamentals settle once again.
Certainly demand remains healthy (with demand set to slow further over August with many away on holidays), but many end buyers are expecting a correction in ship prices and may hold off at lower levels until asking prices drop.
Source: steel guru. 5 August 2014