Bangladeshi recyclers were once again left witnessing Aframax tankers that were favorably positioned in the Far East being diverted towards India, as its competing neighbor continues to outbid them, in what has become an increasingly concerning trend over recent weeks.
What remains the only silver lining to the current situation has been the amount of tonnage that has been delivered to domestic yards over recent weeks, including a number of VLCCs - one of which was beached after several tides of delay, primarily due the lack of being appropriately cleaned to local “gas free for hot works” standards.
On the one hand, several Cash Buyers are holding back from committing their Bangladesh intended units to local Recyclers, as they attempt to inflate local demand and subsequently prices. On the other, local Recyclers are getting desperate to acquire units as they look to satisfy their banking limits before the year-end and are increasingly frustrated at losing a healthy majority of the recently concluded dry vessels to Pakistani Buyers and most tankers & even locally favored PCCs to Indian Recyclers.
While the current conditions seem to incubate the ideal scenario for a robust firming of prices from the Bangladeshi market, local steel plate prices have not enjoyed the upward trajectory witnessed from the Indian market over this past month that would embolden such a firming.
As such, there are limitations to which even tonnage-hungry Bangladeshi recyclers are able to effectively compete.
Source: steel guru. 20 December 2017