Despite
falls of over USD 100 LT LDT in the demo markets over the past six weeks or so,
and an overriding air of despondency amidst continuing falls in prices, deals
continued to be concluded as owners proved themselves to be more than willing
to sell at the lower levels.
Several
deals on dry vessels were done in the 350s and 360s/LT LDT in the sub continent
the clearest sign yet that this new reality on prices is here to stay (at least
for now). Indeed India has become so close in prices to China that many vessels
are no longer making their way over to the sub-continent.
With
a continually steady and willing supply of vessels mixed in with weak local
fundamentals (both currency and steel prices), there appears little hope of
prices improving any time soon.
Certainly,
with several months left for the monsoon season to run, it may be that prices
remain relatively stagnant through August 2012 at the earliest, when there
tends to be the traditional uptick in prices.
Making
matters worse, with freight rates still subdued and many vessels struggling to
breakeven, let alone make any money, the supply of vessels is expected to
continue through the summer. However, with cash buyers frequently burned over
the course of the falls (when every day prices were lower and losses
increased), offers may be on the conservative side in anticipation of potentially
further falls ahead (especially from India).
What
is needed is some stability in the market several weeks of no volatility in
currency or steel prices after which, a base could be established for increased
buying activity gains in the future.
As of
now, for week 25 of 2012, GMS demo rankings for the week are as below:
Country
|
Market Sentiment
|
GEN Cargo Prices
|
Tanker Prices
|
Bangladesh
|
Weak
|
USD
380/lt ldt
|
USD
400/lt ldt
|
Pakistan
|
Weak
|
USD
370/lt ldt
|
USD
400/lt ldt
|
India
|
Weak
|
USD
360/lt ldt
|
USD
390/lt ldt
|
China
|
Weak
|
USD
350/lt ldt
|
USD
370/lt ldt
|
Source: Steel Guru (Source - GMS Weekly). 26 June 2012
http://www.steelguru.com/international_news/GMS_report_on_ship_breaking_industry_for_WEEK_25_2012/270438.html
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