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GMS Market Commentary On Shipbreaking In Week 25 -DESTINATION DOWN!

Steel News - Published on Tue, 25 Jun 2019

Image Source: SteelGuru
The ongoing decline in the Indian sub-continent markets have yet to show signs of abating & easing this week, with ever-lower numbers surfacing from the various ship recycling locations, if any were forthcoming at all. Case-in-point, ever since the announcement of their budget on June 13th, Bangladeshi end Buyers have remained virtually silent as there is still uncertainty surrounding the imposition of the 10% VAT, something that could potentially lead to a USD 25/LDT decline in prices.

As a result, canny end Buyers has started to offer levels below the USD 400/LDT mark to test the waters. However, few Owners or Cash Buyers are willing to ‘bite’ at these levels, optimistic that the powerful BSBA lobby in Bangladesh can overturn the additional taxes / duties, just as they have previously done.

The PSBA in Pakistan has likewise been challenging the Government regarding increased duties that were announced during their recent budget. If successful, we may certainly see Gadani Recyclers return to the game after nearly a year on the sidelines.

For now however, the focus remains squarely on India where prices remain the highest. Yet, confidence has been severely shaken in Alang by drastic steel declines of over USD 20/LDT over recent weeks and many end Buyers would rather wait and watch market developments before committing themselves on new tonnage.

Finally, little has changed in Turkey over the last several weeks. The Lira has improved marginally during the week whilst plate prices languish at region USD 290/MT.

Overall, it has certainly helped that fewer prospective candidates are currently available in the market during the traditionally quieter monsoon / summer season. Towage jobs for undertow and offshore units are generally not approved by marine warranty surveyors over the monsoon period and news of one jack up rig having sunk off Myanmar is already circulating this week, due to one Cash Buyer reportedly taking unnecessary risks.

For week 25 of 2019, GMS demo rankings / pricing for the week are as below.
Demo RankLocationSentimentDry Bulk USD/LDTContainers USD/LDTTankers USD / LDT
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, 25 Jun 2019
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