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GMS Market Commentary on Shipbreaking in Week 24 - BANKING ON BUDGETS!

Steel News - Published on Tue, 18 Jun 2019

Image Source: SteelGuru
The much anticipated Bangladeshi budget was announced on the 13th of June and at the time of writing, local pundits were still combing through the fine print to see if any of the anticipated hikes on taxes / duties had indeed been levied upon the industry. Certain end Buyers have been playing scare tactics in the lead up to the budget, warning that prices could fall by as much as USD 50/LDT, in the event punitive taxes were imposed upon the steel sector (as per the rumors circulating in the market). The Bangladesh Shipbreaker’s Association is a powerful lobby within the country and if any serious changes were to occur in the budget, those in the government in Dhaka will likely be approached by the BSBA, in an effort to reverse any such negative decisions. In the early post-budget news forthcoming from Bangladesh, while a net increase of about BDT 5/LDT (approx. USD 0.6/LDT) on scrap vessels is being reported, billet & commercial scrap import duties in addition to yard VAT are reportedly unchanged. However, the VAT circular has yet to reach the concerned local department at the time of writing.

On the other side, India has endured a woeful time of steel depreciations with about INR 1,500 (appriximately USD 21.50 per tonne) lost over the last couple of weeks, following the euphoria of Mr Modi’s recent re-election victory.

Pakistani struggles also continue, particularly on the currency, which has touched another historical high of PKR 158 against the US Dollar, in further worrying news for this market.

Lastly, The Turkish market re-opened post-Eid with little fanfare as steel plate prices remain unchanged and the Turkish Lira marginally weakened as the working week concluded.

Finally, the big news from last week concerned the fact that a select few yards in Alang have started to work with LR on the approval of facilities that are operating in line with the HKC – adding to NK, Rina and IR classes who are already actively engaged in this field.

For week 24 of 2019, GMS demo rankings / pricing for the week are as below.
RankLocationSentimentDry BulkContainersTankers
1BangladeshDecliningUSD 410/LTUSD 430/LTUSD 420 / LT
2IndiaDecliningUSD 405/LTUSD 425/LTUSD 415/LT
3PakistanDecliningUSD 400 /LTUSD 420/LTUSD 410/LT
4TurkeySteadyUSD 260 / MTUSD 260 / MTUSD 270/MT

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Posted By : Ratan Singh on Tue, 18 Jun 2019
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