Halt way into the first month of the New Year then and a shift in focus is already evident for the industry. India , Pakistan and China have adapted to the continued absence of Bangladesh
Not only have market dynamics changed, but the type of vessel hitting the market has also shifted to bulkers, largely in Capsize and Panamax sectors. At the time of writing at least 5 capsize units were under negotiation with quite a few more mooted for sale within the coming weeks and months. It is quite a shift from the largely tanker dominated year of 2010, when at least 15 single hull VLCCs were phased out of service.
Cash buyer speculation seems to have pulled levels to their current peak (despite a softening in levels in India recently, something many hope to put down to usual market fluctuations), and for the most part this is based on very positive fundamentals such as steel prices and demand. Market outlook therefore remains strong despite the notoriously volatile nature of it all.
Furthermore, the news that in addition to cutting permission received by a few yards, up to 40 more buyers in Bangladesh
The opening of the market again in India Bangladesh can be believed and permission achieved, then both they and Pakistan
India ship breaking industry for WEEK 3, 2011:
A momentous couple of weeks on the buying and bidding set India firmly on the war footing to acquire all types of units at strong levels. A proliferation of reefers, bulkers, tweens and general cargo units surpassed the usual influx of tankers as India
As prices suffered something of a slump over the course of the week (some 1,200/LT LDT rupees down - although three days out of action hardly helped in maintaining the sentiment), it is expected that business as usual should resume on Monday.
Despite news of the above falls, cash buyers continued to speculate on firm Indian prices, with the pick of the purchases being the Polish tweendecker PANAMA EXPRESS (9,106 LDT) fetching an enormous USD 525/LT LDT.
Whilst not quite reaching the heady heights of the last few months then, the current dip in form is expected to only be temporary - and with a strong supply (particularly of cape and panamax bulkers) and a significant cash buyer inventory to choose from, the coming week should be vet another busy one for Indian buyers.
Word was rife over the course of the week that up to 40 yards (on top of the 17 or so already cleared) could be receiving permission to import vessels for scrap.
The environmental ministry has been busy vetting yards over the course of the past few months and a whole new batch may be about to join the elite few who have already managed to take up to 20 vessels onto their plots and some have even received the necessary permissions to start cutting.
Whether these new yards will be able to import vessels straight away is a question of concern for many, especially since new vessels have been beached recently, despite certain units having NOCs in place and just waiting for the final green light to proceed inwards to beaching plots.
If all is clear in the coming weeks and the High Court succeeds in lifting the current ban on the industry7, then we could see a short-term veritable surge in prices as buying in the second largest market in the world cranks into gear again.
Source: SteelGuru. (Sourced from GMS Weekly), Wednesday, 19 Jan 2011
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