GMS weekly report on shipbreaking industry for WEEK 17 of 2011:

As confirmation was received this week that the BSBA would have to go back to court in order to obtain the required extension and ensure that the recycling market in Chittagong remains open, a sense of impending resignation descended on the industry. The transparency of the Bangladeshi market in getting ships delivered and beached is going to remain a thorny issue for quite some time and it appears that only the brave (and experienced) owners and cash buyers wall be prepared to take a punt on bringing ships there in the current climate.

Nevertheless, deliveries and beachings have continued at pace over the most recent two beaching tides, as both cash buyers and recyclers have taken advantage of the short window of opportunity available to them to deliver ships and stock pile local yards. Many are speculating that it may once again be a good few months before the next opportunity presents itself over which to beach the next batch of units.

As such, there was a temporary spike in levels as the last few open buyers reacted in desperation to the upcoming potential setback that the Bangladesh market is destined to face. Yet, levels from Bangladesh were not as competitive with what a resurgent Indian market continues to pay on competing units.

This most recent Indian renaissance has seen the highest levels yet seen since the crash of 2008 (comfortably surpassing what even Bangladesh was there to pay upon reopening last month having been out of the game for almost a year). As such, India remains the market of the week (and the present), flying ahead of both a dithering Pakistan market and an uncertain Bangladesh.

The closing of the Bangladesh market is perhaps playing well into the hands of the Chinese buyers who seem to be coming back into form at just the right time. With units in yards nearing the end of the cutting process in both North and South, and Bangladesh set for yet another spell on the sidelines, China should be expected to get back into the action with further market purchases at decent levels in the near future.

For week 17 of 2011, GMS demo rankings for the week are as below:

Country        Market sentiment  GEN Cargo prices   TANKER price

India           Bullish                 USD 510/lt ldt       USD 540/lt ldt

Bangladesh  Uncertain             USD 510/lt ldt       USD 5401t ldt

Pakistan      Weak                  USD 490/lt ldt       USD 515/11 ldt

China          Steady                 USD 445/lt ldt       USD 465/lt ldt

Source: SteelGuru. (Sources from GMS Weekly). Tuesday, 03 May 2011

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