GMS report on shipbreaking industry for WEEK 40 of 2012:

On one side, India and Pakistan continued their recent upturn in fortunes with several more market sales to note. On the other side, it was the Bangladeshi market that continued to be the real cause for concern with local buyers having no appetite to buy as levels spiraled downwards by the day.

With cash buyer inventories building up outside Chittagong and still no end buyers in sight for any tonnage at sensible levels, many vessels are simply turning around and heading back to WC India shores, where demand is good and prices right.

Meanwhile, losses are (expectedly) beginning to rack up on each vessel that is caught outside Chittagong. Some are even finding ways to exit deals altogether or renegotiate prices down for the most frivolous of reasons. One Handysize bulker has suffered a USD 100/LT LDT price reduction and cash buyers are starting to come to the reality that prices are now in the mid-300s/LT LDT on dry vessels, with tankers just a shade above - if any end buyers open to offering at all under the present conditions!

While things had started to pick up a touch before the onset of the traditional October 2012 holidays this week, a decent recovery from the Chinese market is still needed in order to alleviate some of the pressure on a clearly disturbed Bangladeshi market. Chinese recyclers have been out of action for several months amidst dire local steel plate prices and demand.

Prices do remain some USD 100/LT LDT behind WC India – Pakistan  presently, so the assumption is that most Chinese owners, once back to the table this coming week, will still prefer to bring their older demo candidates across to the sub continent (preferably with a cargo, rather than face up to present market conditions in China).

How long WC India and Pakistan can absorb all of the market tonnage is another matter entirely something will need to click in either Bangladesh or China to share some of the burden as Turkey has done in recent times in taking on geographically positioned units in the Med.

For week 40 of 2012, GMS demo rankings for the week are as below:

Country	Sentiment Market	GEN CARGO Prices	TANKER Prices
India	Bullish	USD400/ltldt	USD425/ltldt
Pakistan	Bullish	USD395/ltldt	USD420/ltldt
Bangladesh	Weak	USD350/ltldt	USD375/ltldt
China	Bullish	USD300/ltldt	USD320/ltldt

Source: Steel Guru.

http://www.steelguru.com/international_news/GMS_report_on_ship_breaking_industry_for_WEEK_40_2012/287131.html