GMS weekly report on Shipbreaking industry for week 02 of 2012:

Despite the go ahead being given for the Bangladeshi ship recycling industry to re open, it was surprising to see the market that has spent the last few months on the sidelines, return to some sort of form (albeit barely).

While the official green light to import vessels once again was received, Bangladeshi Buyers instead sat on the sidelines for the most part as the impending 5% tax issue was yet to be resolved. Essentially, an import tax of 5% is being levied on incoming scrap vessels, making local offers fall well below expectations as the market re opened. Consequently, very few end buyers were walling to take a chance on available units when they could easily be losing up to USD 25 per LT LDT by committing on them now, before holding off for a few weeks to see the outcome of the BSBA appeal to reduce the tax down to 0.5%.

Meantime, it was competing markets that picked up the slack and the lion's share of the available market tonnage, with no less than four units heading to India and the rest ending up with Chinese buyers.

In India, wild speculative buying has once again taken a hold in some encouraging signs that the market there was finally displaying greater signs of life. While the market has improved a little this week, in typical speculative fashion amongst the Cash Buying fraternity, levels were pegged well above the market levels.

Indeed, it was the containers that were taking home the big numbers. Perhaps even higher than tankers although very few standard tankers have hit the market in recent weeks. The price for decent bulkers as well, pushed on by nearly USD 10 to USD 15 per LT LDT, leaving competing Pakistan flustered and struggling.

Some last minute deals were concluded to Chinese buyers at impressive numbers before the market there goes offline for several weeks over Chinese New Year holidays.

For week 02 of 2012, CMS demo rankings for the week are as below:

Country	Market Sentiment	Gen Cargo Prices	Tanker Prices
India	Cautious	USD 470/lt ldt	USD 490/lt ldt
Bangladesh	Weak	USD 465/lt ldt	USD 485/lt ldt
Pakistan	Weak	USD 460/lt ldt	USD 485/lt ldt
China	Cautious	USD 420/lt ldt	USD 440/lt ldt

Source: Steel Guru (Sourced from GMS Weekly). 17 January 2012

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