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GMS report on ship breaking industry for WEEK 16 2012

Steel News - Published on Tue, 24 Apr 2012

Just as prices threatened to touch the USD 500/LT LDT mark and beyond on high spec vessels (tankers and containers), falling steel prices in China, a weakened currency in India, and the continued oversupply of average to poor units saw a price retreat in several of the major ship recycling markets.

Bangladesh was the only market that remained at the forefront of the buying, with demand prevalent for all types of units present. Many Chittagong buyers remain keen to stock their yards before June 2012, when the local budget is expected to bring changes in the tax structure.

Monsoon season is also looming large to the end buyers in the Indian sub continent, this means a shortage of labor and heavy rains adversely affecting both beaching and cutting operations.

Nevertheless, tonnage continues to hit the market at a rapid rate with the focus shifting onto container vessels and reefers of late. Whilst containers continue to find favor with Indian, Chinese and even Bangladeshi buyers now, reefers are becoming increasingly hard to sell due to the un quantified weight of insulation always found on board, which end buyers end up having to pay for without ever finding any use or value of.

Finally, Turkey continued their recent hot streak with the conclusion of several smaller general cargo units this week - the SERGEY S (2,650 LDT), MIKHAIL I (2,650 LDT) and VICTOR K (2,650 LDT) - all built USSR were concluded for region USD 358/LT LDT.

Finally, Turkey continued their recent hot streak with the conclusion of several smaller general cargo units this week - the SERGEY S (2,650 LDT), MIKHAIL I (2,650 LDT) and VICTOR K (2,650 LDT) - all built USSR were concluded for region USD 358/LT LDT.

Overall, a paucity of open buyers is making resale efforts increasingly challenging as many cash buyers currently hold tonnage, which they are having trouble offloading and will no doubt take significant hits on. The coming weeks will be critical in assessing the direction of prices going into the summer / monsoon season. One suspects that the peak for the first half of this year has already been reached with the outlook now for the next few months at least only likely to head one way.

For week 16 of 2012, GMS demo rankings for the week are as below:

CountryMarket SentimentGEN Cargo PricesTanker Prices
BangladeshBullishUSD465/lt ldtUSD 490/lt ldt
PakistanWeakUSD455/lt ldtUSD 480/lt ldt
IndiaWeakUSD450/lt ldtUSD 475/lt ldt
ChinaWeakUSD410/lt ldtUSD 425/lt ldt


Source - GMS Weekly

(www.steelguru.com)

Posted By : admin on Tue, 24 Apr 2012
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