Another busy week in the ship recycling industry saw nearly all markets secure tonnage apart from Bangladesh, where the same old problems persist despite patient cash buyers committing vessels to end buyers.
India saw the annual influx of reefers begin, and with China the only real competitor to take reefer units we can expect a number of sales to take place as the high season is due to end in the coming months.
Meanwhile, the profile of potential scrap units has once again shifted from the Panamax and Handysize units flooding the market in the early part of the year, to container vessels, VLCCs and now reefers, Aframax tankers and capsize bulkers.
There continues lingering doubt as to whether the current rates can persist amidst the constant supply of tonnage and the gradual yard stocking of the keenest and most financially sound buyers.
Indeed, it is very much an end buyer's market, as cash buyer speculation has been subdued of late. It is now a prerequisite of any rational deal to have an open and keen end buyer bidding on the unit so as not to leave the deal exposed at the time of resale delivery.
For that reason, it is also risky doing as is deals, unless at un missable levels since come time of resale, the market may well be down further from the time of purchase, representing a potentially huge loss for the cash buyer.
Finally, China has once again picked up for the week, proving real competition to the Indian sub continent markets, particularly for those geographically positioned units and for the continued disappointment of the Bangladeshi market in terms of prevailing levels and the ability to perform deliver vessels.
For week 12 of 2012, GMS demo rankings for the week are as below:
|Country||Market Sentiment||GEN CARGO Prices||TANKER Prices|
|India||Weak||USD460/lt ldt||USD490/lt ldt|
|Pakistan||Weak||USD460/lt ldt||USD490/lt ldt|
|Bangladesh||Weak||USD450/lt ldt||USD 480/lt ldt|
|China||Bullish||USD420/lt ldt||USD430/lt ldt|
Source: Steel Guru. (Sourced from GMS Weekly). 27 March 2012