Some surprising sales – particularly of panamax
bulkers – seemed to indicate a firming market this week. However, many of these
improvements do appear illusory as cash buyers continue either to speculate on
prices or offer crazy numbers on the back of demand from a specific ship
recycler from the Bangladeshi market, who has taken a keen interest on a
particular unit. On the other side, India remains stagnant and pragmatic,
unwilling to jump up by more than a few $/LDT (even on select / favored tonnage
being proposed to local recyclers) as Pakistan continues to remain cautious for
the most part, unable to match Bangladesh’s pricing / sentiments, despite
demand clearly improving over the recent few weeks. There still appears to be
some uncertainty in Pakistan as to just how much, the implemented taxes will
affect the bottom line of local ship recyclers and there is talk that some
buyers may even sit out the month of September entirely, until this is fully
understood. Bangladesh therefore is the one market that is presently leading
international prices, yet demand there remains specific and volatile with
buyers often changing their mind on pricing particular vessels, from one moment
to the next. As the fourth quarter approaches, it will be interesting to see whether
this recent momentum will be maintained going forward or whether it is just
another flash in the pan”, GMS concluded.
In a separate report, shipbroker Intermodal noted
that “a rather unexpected increase of dry bulk demo candidates in the market,
gave a further extension to the healthy activity we have been noticing in the
Indian subcontinent market during the past week, while the cherry on top of
that was no other than the firming of prices that took place, which was neither
insignificant nor expected. The answer to the question whether pure speculation
or actual end demand is currently behind this strong and rather sudden momentum
is probably positive. The reality is that fundamentals have not changed
materially in any way for the market to keep firming at the moment and that all
this hype could well be the result of cash buyers trying to prop up prices,
possibly to support previous purchases as well. We have indeed seen some very
impressive levels last week being offered for dry bulk tonnage, with Bangladeshi
breakers leading the way and forcing their counterparts to follow up to a
certain degree, while in our opinion, restricted supply of demo candidates is
key in order to support current price levels. Prices this week for wet tonnage
were at around 180-290 $/ldt and dry units received about 170-280 $/ldt.”,
Intermodal concluded.
Similarly, in another report, shipbroker Allied
Shipbroking said that “with the number of demo candidates in the market having
been reduced considerably, it looks as though the conditions might have been
right for competition to help fuel some meaningful increases. We have seen this
in part play out, despite most end buyers still holding a fairly cautious
stance, as there is little to support any excess in terms of speculative buying.
In part the lack of demo candidates has played its part, though we haven’t seen
buying appetite do it’s typical post-summer spike which would be calling for a
completely different market given the current circumstances. There is a sense
that we may well be in the process of another upward market movement over the
coming weeks, especially as demo candidates are likely to remain relatively few
and far between for now, with most sellers likely holding out for a hopeful
seasonal improvement in the freight market, looking to make some last minute
earnings before they send of their overage units to be beached”.
Source: Hellenic shipping
news. 01 September 2016
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