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GMS Market Commentary on Shipbreaking in Week 40 - GREEN SHOOTS!

Steel News - Published on Wed, 09 Oct 2019

Image Source: steelguru.com
Green shoots of recovery have been evident in the subcontinent markets over the past week or so particularly in Bangladesh, where a number of (premium) sales have taken place that breached the USD 400/Ton mark, giving a real sense of encouragement to Ship Owners, Cash Buyers (still with expensive inventory on hand) and End Buyers, who have remained on the sidelines for the most part. Notwithstanding, there remain very few fresh candidates available for sale, as freight markets push on across all sectors, leaving any available scrap tonnage (especially non-green) heading to Chittagong shores at present.

Overall, India remains the lowest and most unfavorable destination at present, with End Buyers lacking any sort of aggression or interest to purchase, as they have been presenting lowball / opportunistic offers for vessels mooted to be heading their way. As such, it seems unlikely that India will get their hands on fresh units any time soon, with only eight vessels beached over the month of September (including small LDT tugs and supply vessels) – reportedly, the lowest number in almost 10 years!

Pakistan too has stayed in its shell, with minimal interest and risible rates (reflective of India), as they prefer to ‘wait and watch’ market developments, following a halt to Iranian scrap imports, which should (hopefully) see optimism flood back to this market. However, what they are ‘waiting and watching’ for is quite the mystery, as they have not secured any serious tonnage for well over a year now!

Therefore, with demand and pricing finally starting to get back on its feet in Bangladesh and a dwindling supply of vessels (despite 2020 just around the corner), it is hoped that competing markets in India and Pakistan may start responding to this long overdue recovery. On the far end, as fundamentals in Turkey level out and prices get steady at the remarkable new lows (nearly USD 50/MT lower than before), the aggression to acquire remains prevalent as local Buyers seek to secure bargain units.

For week 40 of 2019, GMS demo rankings / pricing for the week are as below.
Demo RankLocationSentimentDry BulkTankersContainers
1BangladeshImprovingUSD 370/LTUSD 380/LTUSD 390/LT
2PakistanImprovingUSD 360/LTUSD 370/LTUSD 380/LT
3IndiaImprovingUSD 350/LTUSD 360/LTUSD 370/LT
4TurkeySteadyUSD 210/MTUSD 220/MTUSD 220/MT
 

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Posted By : Rabi Wangkhem on Wed, 09 Oct 2019
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