The week before the Chinese New Yea finally brought some semblance of stability to a ship recycling market that seemed to be in freefall during the previous month.
Indeed, most cash buyers have struggled to offload their existing overpriced inventories at anywhere near sensible/breakeven levels, resulting in something of a panic, GMS said in its weekly report.
The majority of these vessels are now heading to the only bullish market (Bangladesh), in the hopes of salvaging whatever little could be financially scraped out of a deal.
Pakistan remained subdued on the sidelines, despite the announcement of the mini budget recently that brought with it, little material change to the domestic steel and ship recycling sectors.
India also remained mostly absent from buying, as local steel plate prices continued their weekly volatile dance, leaving most end buyers in a conservative mood, intent on securing bargain green or offshore units below the $400 per ldt mark.
The focus remained on Bangladesh, where local the port report showed a multitude of vessels arriving by the week and the number of capable (in terms of ready and available LCs) and keen end buyers remain few and far between.
As local capacity continued to gradually dwindle, those cash buyers with expensive inventories will be left holding a rather heavy bag.
Moreover, once the appetite in Bangladesh starts to shrink, we can certainly expect prices to fall in line with the much reduced Indian and Pakistani markets, ie somewhere in the low $400s per ldt and perhaps lower for certain sized/types of vessels.
Source: tanker operator. 11 February 2019