GMS weekly report on ShipBreaking industry for WEEK 5 of 2011:

China stole the thunder from India this week as pre Chinese New Year buying stepped up a gear with some headline making purchases from under the noses of their Indian sub continent competitors. Several capsize units found their way to local buyers eager to stock up their yards and fulfill their state designated quotas before the year end and the beginning of a nearly two week long national holiday. 

India seemed thankful for the release as the major player on the ship recycling scene for the last few months, thanks to cash buyer speculation that continued to drove prices up beyond all reality Levels and demand have cooled significantly in the last week perhaps by as much as USD 25 on wet and dry. That left many cash buyers downloading their vessels into the market (with many idling outside hoping for an improvement in levels) and fears of (possible) further falls on the horizon.

The boost that the reopening of the Bangladeshi market would bring to the industry was no closer to being realized as a further series of meetings and court hearings was set to determine the immediate future of the industry over the course of next week.

Some good news saw certain vessels, (including a VLCC) that had received clearance prior to the most recent ruling receiving permission, to proceed inwards for beaching. The market has been veritably starved of tonnage for the best part of eight months and there is no doubt what a fully fit and functioning Chittagong market would do to the industry, especially in terms of capacity and upswing in prices (at least a short term). 60 Chittagong buyers have now have their yards vetted and are in a position to begin purchasing once the High Court decrees they are able to do so. 

With budgets in both India and Pakistan also on the horizon and China now out of action for a period of time, it could be a quieter few weeks ahead as respective markets digest and contemplate what has been yet another manic month of January.

Source: SteelGuru (Sourced from GMS Weekly). Tuesday, 01 Feb 2011

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