GMS weekly report on shipbreaking industry for WEEK 14 0f 2011:

Filially, this week saw the High Court judge in Chittagong put pen to paper on the eagerly anticipated order that will allow the reopening of the ship recycling market in Bangladesh. Having been absent from the market for almost a year now, the news came as a welcome relief to many.

Several times over the past year or so was the potential market reopening mooted and indeed during a very short window later last year, NOCs were issued and certain cash buyers were able to beach vessels onto specifically approved yards. However, this most recent set of events was the most encouraging sign yet, in making sure the industry gets entirely back on its feet again.

Despite yards being empty for the best part of the last year, there was no explosion in levels to report, with prices staying mostly in line (if not just above) what India and Pakistan were paying. In other words, bulkers were seeing high 400s with tankers just over USD 500 per tonne, this was not the big boom that many cash buyers and brokers were expecting and as a result, hopes may have to be tempered across the board.

It may as well take some time for local buyers to digest and start implementing the statutes of the order with perhaps months even before the cutting process can even start taking place. However, with the main judge having signed, the second judge having ratified, and the Director General of shipping similarly putting his seal of approval on proceedings, it is very much clear to the respite of many that the industry is back for good.

India and Pakistan continued their pre-monsoon binge on units with several more market sales to note and China is perhaps set for an improvement given the levels on otter elsewhere and the fact that many yard are now starting to empty after the busy start to the year that they enjoyed.

For week 14 of 2011, GMS demo rankings for the week are as below:

Country          Market sentiment    GEN Cargo prices     TANKER price

Bangladesh    Bullish                     USD490/ltldt            USD 515/lt ldt

India             Steady                     USD485/ltldt            USD 510/lt ldt

Pakistan        Steady                     USD485/ltldt            USD510/lt ldt

China            Volatile                    USD 440/lt ldt          USD 460/lt ldt

Source: Tuesday, 12 Apr 2011

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