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GMS Market Commentary on Shipbreaking in Week 35 - FOURTH QUARTER FLOURISH?!

Steel News - Published on Tue, 04 Sep 2018

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Following the conclusion of Eid holidays, unlike Turkey, in Pakistan and Bangladesh this week, prices and demand started to improve with some frisky numbers being promptly put forth by bullish Cash Buyers who are already confident of a market returning to form. At long last, the issuance of cutting permissions on wet tonnage in Pakistan increases resale options for tanker owners and provides competition to the somewhat isolated Bangladeshi (and to a small extent, Indian) market for large LDT / VLCC sized units. There are however, a number of large LDT tankers / VLCCs still blocking space at recycling yards in Pakistan and it will expectedly take several more months (after cutting gets under way) for recycled product to shift from yards and demand to fully return.

Meanwhile, several VLCCs have also been beached in Bangladesh over recent tides and large Dollar value L/C capabilities for a growing number of local Recyclers is getting notoriously tougher, making the overall acquisition of large LDT vessels a particularly precarious proposition for Cash Buyers at present.

India too has endured some worrying moments on local steel plate prices over the past week, but has overall gained almost USD 10/LDT, after the recent volatility witnessed during July and early August.

Finally, both Turkey and (especially) China remain on the sidelines as they remain woefully off the subcontinent offerings, as nearly no news of vessels heading to Turkey has been forthcoming this week, with China almost hitting a stage of absolute irrelevance. As we head into September and subcontinent activity starts to ramp up again, there still remains a pinching shortage of supply. As such, we can expect to see some heated competition over some of the premium vessels that will come available during the fourth quarter of the year.

For week 35 of 2018, GMS demo rankings / pricing for the week are as below.
Demo RankLocationSentimentDry Bulk USD/LDTContainers USD/LDTTankers USD/LDT
1BangladeshPositiveUSD 420/LTUSD 445 / LTUSD 435 / LT
2IndiaPositiveUSD 415/LTUSD 440/LTUSD 430/LT
3PakistanPositiveUSD 410/LTUSD 435/LTUSD 425/LT
4TurkeyWeakUSD 230 / MTUSD 230/MTUSD 240 / MT
5ChinaWeakUSD 160/ LTUSD 180/LTUSD 170 / LT
 

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Posted By : Sanju Moirangthem on Tue, 04 Sep 2018
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