GMS weekly report on shipbreaking industry for WEEK 21 of 2011:

This was the week that many in the industry had been expecting and indeed tearing. The intense activity of the previous few months finally started to take their toll as the numbers began to retreat in alarming fashion across the board. Those ships that were proposed for the week were left chasing down an increasingly fragile market, with available capacity at a premium amidst a paucity of willing and open buyers.

Now may be the time then for the industry is to catch its collective breath and reflect on an incredibly busy and hectic first six months of the year. The monsoon cool down has become traditional so there should be no surprises in a correction that has been long in the making.

Indeed the prices, demand and aggressiveness with which vessels have been pursued, have shown a market in full swing for the majority of this year. The return of Bangladesh to the scene has clearly helped even though the impending closure on July 7th 2011 may cast yet another cloud of uncertainty over proceedings there and the inevitable progress many hoped was being made.

As the market sales slow and everyone close to the industry is keeping a close eye on the next unit to register (in order to peg the new reality on prices), it may perhaps be a quieter few weeks ahead. Moreover, as majority of the buyers in the Indian sub continent either have their vessels either in place or have them due to arrive within the next month or so, new units are not expected be a priority, especially with a harsh monsoon expected on the way.

As such, with the Indian sub continent now in a state of caution, all eyes will likely turn to China, where demand and levels actually seem to be showing signs of improvement for the first time in several months. Being the only market also not affected by the monsoon and restrictions on tankers (along with Pakistan) needing to be gas free for hot works, it could be busy period ahead for Chinese local buyers, even though levels as of now are some USD 50 per tonne behind.

For week 21 of 2011, GMS demo rankings for the week are as below:

Country         Market Sentiment   GEN CARGO Prices     TANKER Prices

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

India             Weak                   USD 495/lt ldt          USD 525/lt ldt

Pakistan        Cautious               USD 490/lt ldt          USD 5101t ldt

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

Source: Steel Guru (Sourced from GMS Weekly). Tuesday, 31 May 2011

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