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GMS Market Commentary on Shipbreaking in Week 08 - Tentative Times

Steel News - Published on Tue, 25 Feb 2020

Image Source: ejatlas.org
Despite the recent decline across all recycling sectors, SNP activity and deal flow remains comparatively high, especially as freight markets show few signs of improving anytime soon. Last week, all of the concluded units focused on an Alang redelivery, despite an ongoing decline in steel plate prices by almost USD 30/LDT over the last several weeks and an Indian Rupee that has taken a beating of late. Owners and Cash Buyers have now started chasing down market prices and it does seem as though all subsequent deals will likely be concluded at lower levels. There has been a small jump in Indian plate prices during the course of the week - gaining as much as USD 10/Ton (but ending the week at an overall USD 5/Ton gain) to finally make up for some of the previous losses. Yet, sentiments remain nervy, given the number of ships available for sale and the recently weakening international shipping markets being further aggravated by the Coronavirus situation emanating from Wuhan, China.

Freshly imposed restrictions also remain in place for vessels that have called China and for those with Chinese crew on board. Bangladesh is not allowing entry of ships with Chinese crew or for those units that have called China within a 21 day window. The situation in India is even bleaker, with any ship that has called China since January 15th being denied entry until further notice and things start to clear up.

'As is' deliveries are also being jeopardized with many Far Eastern ports not allowing ships that have called China recently or with any Chinese crew on board. As such, these are indeed tentative times for all sides of the shipping industry, with the recycling markets being no exception.

On the far end, Turkey remains in really poor condition with steel plate prices that have fallen by about USD 40/MT over the last several weeks and a Lira that is pushing further North beyond the TRY 6.10 mark.

For week 8 of 2020, GMS demo rankings / pricing for the week are as below.
Demo RankLocationSentimentDry Bulk USD / LDTTankers USD/LDTContainers USD/LDT
1IndiaDecliningUSD 380 / LTUSD 390 / LTUSD 400 / LT
2BangladeshDecliningUSD 370 / LTUSD 380 / LTUSD 390 / LT
3PakistanWeakUSD 360 / LTUSD 370 / LTUSD 380 / LT
4TurkeyWeakUSD 230 / MTUSD 240 / MTUSD 240 / MT
 

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Posted By : Rabi Wangkhem on Tue, 25 Feb 2020
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