Market commentary
Bullish week!
Another week of speculation has passed in the Indian sub-continent ship recycling markets, as sales continue to register at ever increasing numbers, to increasingly bullish Cash Buyers who certainly seem to be banking on a Q4 revival.
The chief proponents of this most recent and ongoing resurgence are India, and a re-merging Pakistani market is back and bidding once again, after almost a year on the sidelines amidst political, financial, and disastrous economic chaos that nearly drove the country to a grinding halt.
Bangladesh meanwhile remains stranded at the foot of the sub-continent price rankings for another week, with truly lowball and non-serious offers emerging from any of the currently open Chattogram Recyclers – who themselves are an increasingly dwindling group amidst these most recently limiting L/C restrictions.
As such, it has increasingly turned into a subcontinent market of two, with India and Pakistan at the forefront, duking it out on any available market tonnage.On the West End, Turkey remains suspended in no-man’s land, with currencies unchanged and fundamentals dancing around levels from last week.
Overall, there has been a noticeable increase in the number of container vessels that were concluded for a recycling sale in recent weeks, and a couple more were confirmed this week as well, including a Sinokor controlled unit at a highly speculative USD 589/LT LDT.
In other news, GMS is proud to announce the roll out of the world’s first Ship Recycling Digital Platform, appropriately entitled the ‘Ship Recycling Portal’. The platform aims to revolutionise the way sales and purchases of ships happen locally into sub-continent markets, by offering a more transparent, efficient, and overall convenient service. The platform was launched at an exclusive event in Bhavnagar, India that was attended by over 80 leading ship recyclers.
Bangladesh
On the slide!
Bangladesh has endured another miserable week on the sidelines as local steel plate prices continue to remain dead in no-man’s land, in addition to the Bangladeshi Taka that has only moved in an increasing (yet gradual) descend against the U.S. Dollar,ending the week at levels in excess of BDT 109.50.All of this has left Chattogram Buyers handicapped with their offer levels over recent weeks, with no chance of competing or even securing any units on offer (even those that are placed geographically to Bangladesh), so bad has the present condition become in the domestic ship-recycling sector of late.
Moreover, as competing sub-continent markets have recently taken off, it is only natural to expect a period on the sidelines for the Chattogram market, whilst they continue to adjust to these new higher realities from the competition, all while coming to terms with declining fundamentals of their own.L/Cs are also proving to be troublesome to obtain and combined with the degraded steel prices & stagnant overall demand, this is a market to avoid for the time-being.
India
Positivity!
India has certainly enjoyed another positive week, with some increasingly & impressively priced container sales being reported to an India re-delivery, in addition to swelling enquiries that have been emerging from hungry Alang Recyclers, with firmer offers that may inadvertently satisfy some of these ongoing above market Cash Buyer acquisitions that have recently been plaguing the industry.
Those on the wire have reportedly been two more container units that were committed this week as at the UGL HONGKONG (7,009 LDT) was concluded for a healthy USD 530/LT LDT, basis an ‘as is’ Oman delivery.Subsequently, Sinokor fixed another one of their smaller container vessels as the SINOKOR VLADIVOSTOK (4,691 LDT) managed to fetch an astonishing and well-above market USD 589/LT LDT (reportedly, on a delivered basis).
This positivity could be attributed to the impending G20 summit in India next week, which should see most of the world’s top leaders gather here, in order to discuss and eventually implement a raft of new infrastructure projects, in addition to various other financial stimuli that are expected to further boost India’s economy.
However, fundamentals affecting the domestic ship recycling industry have certainly not been helpful this week, as local steel plate prices declined marginally by about USD 5/Ton, while the Indian Rupee finally crossed Rs. 83 against the U.S. Dollar, only to dip below before the week ended.Just how these sales will eventually play out on an India delivery remains to be seen. For now, local sentiments remain on a relatively positive note, as the onset of the traditionally positive Q4 period mixed in with the G20 summit is certainly Alang keeping hope is high.
Pakistan
Solid (cautious) backup!
Pakistan remains a solid and competitive backup to India but does remain severely handicapped (in comparison) by its self-imposed restrictions on the availability of fresh L/Cs for incoming vessels for recycling.Only 4 – 5 vessels have recently received L/C approvals, yet, Local Buyers continue to workon further fresh approvals and once these do come through, we can (hopefully) expect further well-priced deals being concluded into Gadani over the final months of the year.Fundamentals are however something to remain concerned about for the rest of us in the industry as despite making a marginal improvement of USD 6/Ton this week, local steel plate prices have remained disconcertingly dead since January and there is no telling how this will affect steel prices as we move forward in the short term (especially towards the year-end). Moreover, the Pakistani Rupee’s suicidal decline past PKR 307.20 this week certainly was eye-opening. However, it did end the week at nearly PKR 305 against the U.S. Dollar, which certainly should still remain of concern as these are definitely some of the highest records for the currency.Notwithstanding, it does seem that cheaper dry bulk vessels will be heading towards Pakistani shores in the immediate future, whilst containers will continue to head Towards India as levels remain at least 50/LDT higher than those from Pakistan, and Bangladesh is completely out of the sub-continent picture.
Turkey
Unmoved!
As vessels continue to be committed into sub-continent markets (India / Pakistan), the Turkish market remains devoid of any activity in comparison, as there remains little to report from this market.Despite news of market offerings into Aliaga, there has been no news emanating of any fixtures over the course of the week. Moreover, even local fundamentals have little to report as local steel plate prices reported no interesting movements, while the Turkish Lira continues to languish at levels close to TRY 26.84.As such, Turkey ends the week on an entirely unchanged note.
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