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GMS Market Commentary on Shipbreaking in Week 49 - December Respite

Steel News - Published on Tue, 10 Dec 2019

Image Source: Shipbreaking
The final month of the year has provided some much needed respite and emerging positivity to an industry that has witnessed its fair shareof crises and declines this year. Over USD 100/LDT has been lost on vessel prices at the lowest points seen this year and thankfully, December has finally seen some optimism surface on levels once again as both supply and demand ramp up ahead of the pivotal low Sulphur regulations that are set to be introduced from January 2020. As it stands, after some damaging losses experienced over the last few months, local steel plate prices in India, Pakistan and Bangladesh and even Turkey of late have been inching up, in addition to the currencies in India, Pakistan and Turkey that have started to stabilize, after some rather turbulent moments experienced through the year.

Indeed, it will be interesting to see if Pakistan gets back into the buying after well over a year on the sidelines, as nearly all domestic recycling yards are still deprived of any meaningful tonnage. Perhaps as a result of which, demand seems to finally be emerging, as local offerings are now becoming competitive with both India and Bangladesh.

At the far end, Turkish fundamentals and vessel pricing have remained unchanged for a few weeks now, with little to report in terms of material change for a market that's been struggling through a famishing shortage of tonnage that has exasperated Aliaga Recyclers.

Overall, in the subcontinent markets, there remain very few Buyers open to take in the largest vessels on offer, given that banks across the subcontinent have become far more restrictive on the size and USD amounts they are willing to sanction on new LCs.

On a side note, this week, it has been disappointing to note the arrival of a high-profile Panamax container that was sold for strictly HKC green recycling, has now been delivered to a non-HKC green yard in Bangladesh - once again proving that Ship Owners should be wary about who they commit their 'as is' green tonnage to and that going with the most experienced / trustworthy players to ensure compliance is far more paramount than aiming for the last few Dallars on the table.

For week 49 of 2019, GMS demo rankings/pricing for the week are as below.
Demo RankLocationSentimentDry BulkTankersContainers
1BangladeshImprovingUSD 365/LTUSD 375/LTUSD 385/LT
2IndiaImprovingUSD 360/LTUSD 370/LTUSD 380/LT
3PakistanImprovingUSD 355/LTUSD 365/LTUSD 375/LT
4TurkeySteadyUSD 230/MTUSD 240/MTUSD 240/MT

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Posted By : Arun Huidrom on Tue, 10 Dec 2019
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