December 02, 2008

Market commentary on ship breaking

GMS Weekly reported that ship recyclers remained uncertain about the direction in which their local markets are moving.

It said that “In Bangladesh, this week was accentuated by lack of activity. The government backed price ceiling on ship steel has ship recyclers bewildered. In both India and Pakistan, local steel prices have fallen in spite of no such orders from the government.”

It added that “Cash Buyers are finding it increasingly difficult to judge the market as well. While the supply of tonnage remains consistent, most owners are not ready to accept today’s lower levels and as a result, ships that were expected to be sold this week remained unsold.”

It said that “Unless steel prices unexpectedly increase over the next few weeks, it will be very hard to see demo prices return to the roaring. The news of price ceiling on steel prices in Bangladesh, convinced Indian and Pakistani ship recyclers, that they would be able to buy ships considerably cheaper than before.”

However, while there is no denial of a correction, Bangladesh did surprise her neighbors once again by benchmarking prices well above other markets. As a result, Bangladesh took back the pole position in demo rankings.

GMS demo rankings for the week are summarized below