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GMS Market Commentary on Shipbreaking in Week07 -Caught Cold

Steel News - Published on Tue, 18 Feb 2020

Image Source: SteelGuru
After a rather positive start to the year, particularly for the rampant Indian market, subcontinent fundamentals have been reflecting weakened global shipping sentiments as declining steel plate prices and a diminishing demand on the back of a massive supply of vessels has suddenly ushered markets into negative territory. A plethora of Capesize Bulkers and Containers have been sold this year as yards in Alang and Bangladesh start to fill up after a frantic start to 2020. However, of late, the markets have lost about USD 25/LDT from the peaks of a few weeks ago and it seems as though most End Buyers are now content to wait-and-watch market developments, before committing on any of the number of available fresh candidates. Further troubling news on the Coronavirus from Wuhan that eventually affected ship recycling markets, emerged this week as it was announced in both India and Bangladesh that any ships with Chinese crew and / or last ports of call in China would be denied immediate entry, unless a period of quarantine is enforced onboard. In Bangladesh, this amounts to about 21 days from the last port of call and we have already heard of Doctors being dispatched to incoming vessels, in order to assess the crew before boardings can commence and vessels are allowed to beach.

Thankfully some good news has been emerging from China in the past few days with reduced cases now being reported. Many cities remain on lockdown but most people are expected to filter back from their extended Chinese New Year holidays from next week onwards. So the likelihood is that this crisis will continue to run for some months, particularly with the number of international infection cases (and number of fatalities) still rising.
Lastly, the ongoing situation continues to deteriorate in Turkey as fundamentals decline further, despite a growing local expectation that the current situation is expected to stabilize moving going forward.

For week 7 of 2020, GMS demo rankings / pricing for the week are as below.
Demo RankLocationSentimentDry Bulk USD / LDTTankers USD/LDTContainers USD/LDT
1IndiaDecliningUSD 380 / LTUSD 390 / LTUSD 400 / LT
2BangladeshDecliningUSD 370 / LTUSD 380 / LTUSD 390 / LT
3PakistanWeakUSD 360 / LTUSD 370 / LTUSD 380 / LT
4TurkeyWeakUSD 230 /MTUSD 240 / MTUSD 240 / MT
 

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Posted By : Nishith Sharma on Tue, 18 Feb 2020
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