With the summer / monsoon season fully
under way across the Indian sub-continent, prices and demand have started to
decline across the board for various reasons. While on the one hand, the
seasonal labor returning to their home towns due to the constant rains
affecting the cutting processes and hampering overall production is the
traditional reason for the cooling markets, on the other hand, declining local
steel plate prices, currencies and missing cutting permissions have driven
demand for tonnage, down this week.
As such, most end Buyers are preferring
to temper their purchases as levels and interest slips in anticipation of a
potential fourth quarter rally, which has historically been a busy period in
the ship recycling industry and this year is expected to be no different, given
that owners (particularly in the tanker sector) continue to struggle with dire
charter rates and (wet) units seem to fall out of the sky.
A sustained level of scrapping of tanker
and offshore fleets will be needed just to aid levels and bring a certain
equilibrium back to these sectors in the years ahead – just as dry and
container rates have finally bounced back, following a period of sustained
recycling in the years gone by.
Supply is expected to persist going
forward and sales will continue to take place, often to speculative Cash Buyers
who do not have end Buyers lined up but prefer to utilize their available
finance streams. As such, as long as the inflow remains at a steady trickle
rather than a deluge, prices should remain relatively stable as the markets
sail through the monsoons.
Source: steel guru. 03 July 2018
No comments:
Post a Comment