GMS weekly report on shipbreaking industry for WEEK 10 of 2011:

The big news for the week of course centered around Bangladesh and the much anticipated reopening of the Chittagong market after almost a year out of the game. New conditions are expected to be put in place and the industry will be closely monitored in the future to ensure standards are maintained, but perhaps the big player (in terms of price and favored size of units) is back again to compete with India, Pakistan and China.

However, it's not all green as yet since the judge who was expected to sign off on the court order from last week, has yet to put ink to paper. There is a growing concern as to why this could be, but many are hoping this is just a formality and that a full set of guidelines will be drawn up by the end of next week.

Tankers will have to be gas free for hot works from now and hazardous materials inventories wall have to be thorough and specific as they are now in India. As a result, many end buyers are refusing to commit to tonnage until they have fully read, understood and digested the new regulations (and that can only happen once the judge signs the order).

Nevertheless, cash buyers have wasted no time in taking tonnage for Bangladesh with some phenomenal levels touted from the market. Some proved to be unfounded rumors more wide of the mark, but at the time of writing, there were still some deals being furiously negotiated and concluded at strong numbers. The logic in concluding deals before the order has even been signed, ratified and approved, is perhaps for another day, but speculation has always been the name of the game in the cash buying industry.

For the time being at least, bulkers have seen (and concluded at) USD 500/LT LDT and excess, with tankers (suitably gas cleaned) seeing USD 525/LT LDT and excess. The impact on competing markets has yet to be fully realized, but there is some suspicion they will have to raise their levels just to keep up.

For week 10 of 2011, GMS demo rankings for the week are as below:

Country        Market sentiment    GEN Cargo prices    TANKER price

Bangladesh   Bullish                   USD 500/lt ldt         USD 525/lt ldt

India            Steady                  USD 465/lt ldt         USD 490/lt ldt

Pakistan        Steady                  USD 465/lt ldt         USD 4851t ldt

China           Volatile                  USD 430/lt ldt         USD 450/lt ldt

Source: SteelGuru. Tuesday, 15 Mar 2011

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