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GMS Market Commentary on Shipbreaking in Week 39 - Cartel Conundrum

Steel News - Published on Wed, 30 Sep 2020

Image Source: Shipbreaking
The prominent news last week centered on the formation of yet another cartel in Bangladesh, which is another attempt by a handful of powerful local Recyclers to try and secure vessels at controlled, below market prices. Every few years, we see these attempts being made. Yet, all this does is reduce the competitiveness of the Bangladeshi market and the fallacy of it all sees the cartel break up in a very short period of time (within days, if not a few short weeks). Furthermore, with Pakistan and India remaining competitive, there is every chance that Bangladeshi buyers will likely lose any and all markejt tonnage to their sub-continent neighbors.

Several VLOC sales in recent weeks have reportedly been concluded to Pakistani and Bangladeshi End Buyers and a majority of the most capable (in terms of L/C limits) and keen End Buyers are starting to (if not already) fill their plots with large LDT tonnage once again.

India remains the HKC green destination of choice (with almost 80 HKC approved yards with NK, Rina, LR classification societies) and there is now a trickle of green deals every week to consider - especially as container candidates start to slow from many of the major liner owners amidst an uptick in charter rates.

Finally, key Turkish fundamentals recorded declines this week resulting in levels for ships slipping marginally.

Overall, as parts of Europe suffer with the possibility of a seemingly inevitable second wave of Coronavirus cases and stock / LME markets start to show signs of reversal, it may be a difficult upcoming winter this year, at least unless an effective vaccine is discovered.

Demo Rank
Location
Sentiment
Dry Bulk
Tankers
Containers
1
Pakistan
Steady
340/LDT
360/LDT
370/LDT
2
Bangladesh
Steadv
330/LDT
350/LDT
360/LDT
3
India
Steady
320/LDT
340/LDT
350/LDT
4
Turkey
Weaker
195/LDT
205/LDT
215/LDT

Source :

Posted By : Yogender Pancholi on Wed, 30 Sep 2020
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