GMS weekly report on shipbreaking industry for WEEK 18 of 2011:

The continued concern over the slide in commodity prices had yet to filter through to the ship recycling sector as prices, deliveries and beachings continued in bulk, especially as supply and demand showed no signs of abating just yet.

Indeed, it was good news for the Bangladeshi market as the court granted a two month extension giving many buyers the time they were seeking to import units and stock their yards. However, as the previous two beaching tides had seen a large number of units (mostly cash buyer as is tonnage) being delivered to end buyers, there was a resulting touch of caution for obtaining fresh units at continued firm levels as more of a wait and watch mentality was being adopted by local Chittagong buyers.

Indeed, with a two month window now to cherry pick units, it may not be until the last tide before the upcoming closure, that we would see speculation and prices pick up to any significant/noticeable degree. Furthermore, with the monsoon season just around the corner and the traditional cooling in prices usually accompanied by it (the wet season usually preventing buyers from beaching cutting vessels to the most satisfactory degree), a possible further downward pressure on prices could be evident in the coming weeks.

Nevertheless, for the time being prices in India maintained their current highs with Bangladesh not too far behind. Pakistani buyers were left to pick up the best of the rest (especially on the tanker side with the less strict requirements in place there). Reportedly two VLCCs are presently under talks to find their final homes in Pakistan to willing (and able given the hefty price tag) end buyers.

Finally, China was left lagging back by some USD 50 and Chinese buyers would need to pick up on the price in light of the recent news from Bangladesh just to stay in the race on market units.

For week 18 of 2011, GMS demo rankings for the week are as below:

Country      Market sentiment  GEN Cargo prices   TANKER price

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

Bangladesh Weak                  USD 500/lt kit       USD 525/lt ldt

Pakistan     Weak                  USD 490/lt ldt       USD 5101t ldt

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

Source: SteelGuru (Sourced from GMS Weekly). Friday, 13 May 2011

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