GMS weekly report on shipbreaking industry for WEEK 8 of 2011:

Disappointment, for those expecting a Bangladesh reopening this week as the High Court declared, yet again, a postponement in proceedings for the case to be heard now on February 27th 2011.

Such delaying tactics have become customary for those authorities almost reluctant to make a firm decision and face the wrath of either side. What is clear now, since the PM of Bangladesh became involved last week, is that some sort of decisive action needs to be taken imminently for the market to reopen (as it has been declared a vital one for the well being of the economy). However, that local standards have to improve is a given (especially in light of the accident last month that has rocked the industry), but all parties concerned are working towards a positive resolution that would hope to favor all sides.

The buying continues unabated though in those global markets able to take vessels, as China continues to snare the capes (and bid on those big ones on the market including two from Hyundai and Vale). India and Pakistan, having lost the hunger due to a huge oversupply in vessels over the past two months, remain open to take desired units (including several juicy tankers sold this week). Finally, Turkey registered on the buying front this week as the small LDT vessel TWIN (1,209 LDT) manage to fetch levels of USD 292/LT LDT off the back of the recently committed HMS INVINCIBLE.

However for most other vessels (including general cargo, reefers and bulkers), unless an attractive lower price is able to secure the unit, most buyers are content to either wait and watch for potential further market falls, or not show their hand at all, choosing to ignore most of the vessels put in front of them.

With several large units still working going into the new week then, and as Bangladesh speculation pushed prices up towards the end of last week, it will be interesting to see where Monday leaves those offers, and with what sort of aggression cash buyers will be pursuing tonnage given the continued state of flux the industry finds itself in.

Source: SteelGuru (Sourced from GMS Weekly). Tuesday, 22 Feb 2011

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