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GMS Market Commentary on Shipbreaking in Week 11 - NO END IN SIGHT!

Steel News - Published on Tue, 20 Mar 2018

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Unsurprisingly this week, another four VLCC sales (both market and private) were reported, further adding to the burgeoning volume of large LDT wet units that have been sold through 2018 already – a number that is quickly reaching 20 units to date, with seemingly no end to the supply in sight!

Pakistan has yet to officially open its doors for tankers and this is concerning for those Cash Buyers who have been banking on an imminent Gadani reopening while stacking up on their tanker purchases of late - especially VLCCs, which can block anywhere between USD 16 - USD 20 million on each transaction!

Reportedly, there (still) remains only one final sign-off on the order (in Pakistan) that is required to lift the ban. For now however, the Pakistan Naval Authorities and Maritime Security Agencies will not permit tankers (intended for recycling) to even enter Pakistani waters until all such clearances have been set in place.

Meanwhile, a fresh round of rumors state that the final wording of the order (allowing tankers in once again) has yet to be drawn up in full. It is expected that in addition to local certification, authorities may also accept incoming tankers with “gas free for hot works” certificates issued at the last port of call, which is certainly not as strict as the Bangladeshi and Indian requirements presently in place. Yet, until the finalized & approved order is in hand and the first few cases have entered Gadani, there is no telling exactly how the new requirements will be interpreted, evaluated and finally approved by local authorities.

On the sales front, even though the VLCC fixtures for the week have been included in the Bangladesh section, the reality is that Chittagong buyers with available space and viable LCs are rapidly dwindling. As such, those units concluded by Cash Buyers on an ‘as is’ Middle East basis look increasingly like a Pakistan delivery, if and when it does reopen (with the concerned Cash Buyers absorbing all of the risks and costs to hold the units until such time).

For week 11 of 2018, GMS demo rankings / pricing for the week are as below.
Demo RankLocationSentimentDry BulkContainersTankers
1BangladeshSteadyUSD 450 / LTUSD 470 / LTUSD 470/LT
2PakistanSteadyUSD 450 / LTUSD 460 / LTN/A
3IndiaSteadyUSD 440 / LTUSD 460 / LTUSD 450 / LT
4TurkeySteadyUSD 280/ MTUSD 280 / MTUSD 290 / MT
5ChinaWeakUSD 210/LTUSD 230 / LTUSD 230 / LT

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Posted By : Nanda Koijam on Tue, 20 Mar 2018
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