For another week, the international ship recycling slump that has overtaken the markets in recent/summer months has persisted, with little to no activity and hardly any firm demand from Recyclers, while fundamentals remain precariously unstable as reported by Hellenic Shipping.
Currency shows symptoms
In addition to the currency that showed symptoms of firming towards Rs. 79.20 against the U.S. Dollar before sliding down towards Rs. 80 mark before the week concluded steel plate prices have once again begun to exhibit its fair share of volatility in India.
With currencies and plate prices continuing to show some flimsy signs of stability (versus the US dollar) at their lowest levels ever, the economies of Pakistan and Bangladesh continue to teeter precariously on the edge. The Sri Lankan collapse, which the majority of pessimistic recyclers in the subcontinent have been fearing, does not appear to be in risk of happening again.
Finally, with declining plate prices and vessel prices that are each one drop away from oblivion, the Turkish market continues to decline and slumber in the doldrums.
While dry bulk charter rates have recently started to decline in the larger segments, many anticipate (and hope for) recovery in the fourth quarter of the year. As a result, it is premature to anticipate significant growth in the pool of candidates for recycling. Even in the most troubled segment of the shipping industry—VLCCs—charter earnings and rates/interest have increased once more, further robbing markets for ship recycling of a supply of tonnage.
Larger LDT tonnage imports into Bangladesh are prohibited since, generally speaking in the sector, L/Cs exceeding USD 3 million (rumoured to be further reduced to USD 2 million) struggle to obtain approvals from the Central State Bank in Bangladesh. Before the situation there can return to some kind of routine, it will take some time for the economic crisis and the currency problems to pass.
For week 33 of 2022, GMS demo rankings/pricing for the week are as below:
|Demo Rank||Location||Sentiment||Dry Bulk
|1||Bangladesh||Weak||570 / (small)
|580 / (small)
|590 / (small)
|2||India||Weak||560 / LDT||570 / LDT||580 / LDT|
|3||Pakistan||Weak||550 / LDT||560 / LDT||570 / LDT|
|4||Turkey||Weak||240 / LDT||250 / LDT||260 / LDT|
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Source: Hellenic Shipping