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GMS Market Commentary on Shipbreaking in Week 19 - DECLINE AND FALL!

Steel News - Published on Tue, 14 May 2019

Image Source: Dawn
The first signs of decline have started to set in on the industry, ahead of the traditionally quieter monsoon season that’s just around the corner. For some time now, there has been the lingering anticipation that the Bangladeshi market is due for a period on the sidelines, as a result of over extending themselves on the multitude of high-priced vessels sold for recycling so far this year. The Bangladeshi budget is also due on June 13th, 2019 with rumors around new duties / taxes on the domestic steel sector making the rounds, which in turn has led to increased nerves and reduced / minimal offerings on any working vessels that may arrive after or close to this date.

On the other side, the Indian market endured another harrowing week with both local steel plate prices and the Indian Rupee registering noteworthy declines over the course of the week, subsequently carving out a new reality on pricing for vessels being negotiated.

Pakistani Recyclers have virtually remained out of the buying, although they may be pleased to see that declining offerings from competing neighbors may inadvertently drop them back into the game, especially if the current trend persists much longer.

On the global end, the recently resurfaced US – China tariff squabbles have also done little to reduce Recycler (especially Indian) anxieties as stock markets endured another turbulent week as well. All of this leaves the Indian subcontinent markets in a precarious position, heading into the traditionally quieter monsoon / summer months.

For the time being however, the supply of tonnage and whether Owners will keep chasing the market down, remains the big question, given that charter rates – particularly across the beleaguered dry bulk (and to a certain (lesser) extent now, container sector) - continue to struggle.

Finally, Turkey, like India, suffered through declines in local steel plate prices and the currency as well, as its local offerings deteriorate in kind.

For week 19 of 2019, GMS demo rankings / pricing for the week are as below.
Demo Rank Location Sentiment Dry Bulk USD/LDT Containers USD/LDT Tankers USD / LDT
1 Bangladesh Declining USD 430/LT USD 450 / LT USD 440 / LT
2 India Declining USD 420/LT USD 440 / LT USD 430 / LT
3 Pakistan Steady USD 410/LT USD 430 / LT USD 420 / LT
4 Turkey Declining USD 260 / MT USD 260 / MT USD 270 / MT
 

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Posted By : Rabi Wangkhem on Tue, 14 May 2019
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