LETHARGY
The lethargy in sub continent recycling markets continues for another week as owners and cash buyers continue to offload tonnage at spiralling prices, chasing down rates seemingly by the day.Indeed we have seen prices decline from over USD 600/LT LDT earlier this year, to seeing several standard (albeit poor condition) dry bulk sales below USD 500/LDT recently.
So a fall of over USD 100/LDT has been realised in recycling markets since the start of the summer and the age old problems persist of strained LCs and lack of financing, meaning there appear to be more vessels than capable end buyers at present – certainly in the more challenging markets of Pakistan and Bangladesh.India remains a constant market, in terms of end buyers capable of opening LCs, yet prices are once again positioned at the bottom of the pile in the sub continent, with most end users fearful of committing on fresh tonnage such has been the extent and ferocity of recent price falls.The supply of tonnage – particularly from Far East and China markets – has remained a constant over these summer months (when it is usually quieter), and those cash buyers who have bought ‘as is’ tonnage without back to back end users in place have been hardest hit with tumbling levels and a stockpile of seemingly unsellable tonnage.There is hope however that once monsoon season ends and product starts to shift from yards and mills reopen, that we may see a greater demand at least to acquire once again.
BANGLADESH
EXCESS TONNAGE!
Bangladesh has been the market to struggle with (or perhaps exploit) the excess tonnage over these summer months with some absolutely bargain deals being done to end buyers below USD 500/LDT.Fundamentals in terms of steel prices actually remain remarkably sturdy, it is just that the constant rains that invariably come at this time of year due to the seasonal monsoons, means that product is not shifting from yards to mills, so there is a backlog of unsold steel material lying idle for the time being (which should start to ease once monsoon ends in mid September onwards).In terms of sales, the container vessel SOL HIND (7,792 LDT) was fixed for a decent USD 565/LT LDT for a prompt end August delivery (with 200 Ts bunkers), whilst another poor condition Chinese bulker (with questionable crane removal weight), the MINGZHOU 25 (6,729 LDT) was committed at USD 400/LT LDT (‘as is’ Zhoushan), and the smaller MPP JIN YUAN SHENG 9 (3,000 LDT) fetched USD 490/LT LDT.
INDIA
SINKING!
India has sunk to the bottom of the sub continent price rankings and remains tentative and nervous with any offers on new tonnage. Steel prices tend to go up and down by around 500 rupees on a daily basis, so there seems to be little stability in local fundamentals, whilst the rupee has been trading in the high 82s against the US dollar in further concerning news.India celebrated this week their 77th Independence Day, so it was little surprise to see muted demand and no sales take place, particularly as other markets continue to outbid them on those vessels that are available.Only one sale was concluded for the week as the favourably sized container (for workable LCs) SINOKOR AKITA (4,672 LDT) was sold for a firm USD 564/LT LDT, the second such sale from Korean owners Sinokor over the past month.
Pakistan
EAGER TO RETURN!
Whilst prices remain competitive and demand good, the key issue in Pakistan today is the availability of ready and workable LCs from those end buyers that have emerged back to the bidding table after almost a year of hiatus.Several sales have taken place into Gadani in the low USD 500s/LDT and it is now a waiting game to see if those LCs can be opened and the deals performed as all in the industry will be hoping in order to add another competitive market back into the mix after a long period of absence and instability.Certainly the ongoing economic and political turmoil has been a hindrance to any positive market moves, basically nullifying any deals over the last year, so all will be hoping that the market is able to bounce back and conclude some business finally.
Turkey
SIMILARLY DETERIORATING!
Turkish prices have endured a similar deterioration over these summer months to follow the sub continent decline, and minimal deals have been concluded to Aliaga buyers as a result.The historical and unprecedented depreciation of of the Turkish Lira has of course been a key component in this, but steel prices have similarly failed to impress, as we have also seen in sub continent locations.The supply of tonnage over these last 2-3 months has largely come from the East and mostly from owners not motivated by EU or HKC green requirements, so it has not been too surprising to see minimal deals concluded to Turkish buyers.
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