Demolition Market in “Festive” Mode
Intermodal said in a separate weekly note that “a fall in steel prices strongly driven by a slower demand from China had an adverse effect in the demolition market with buyers across all the main Indian-subcontinent nations lowering their bids w-o-w. Having said that, the decrease in offered scrap levels was followed by an overall subdued activity across all demolition markets. The drop in steel plate prices was most pronounced in India followed by a slighter decrease in Bangladesh.
This was not the case in the Pakistani market, where steel prices improved w-o-w. However, breakers in the respective region adopted the overall downward sentiment of their neighbors which coupled with the continuous depreciation of PKR has led buyers to reduce their demo offers as well. All in all, despite last week’s loss in demolition offered levels, the shortage of vintage units will limit a sharp drop in buyers’ bids in the foreseeable future. Average scrap prices in the different markets this week for tankers ranged between 330-610/ldt and those for dry bulk units between $320-600/ldt”, Intermodal concluded.
Allied added in its report that “a rather uninspiring period for the ship recycling market seems to be already in motion, given both limited activity and softening offered scrap price levels across some of the main demo destinations. More specifically, in Bangladesh, there is no considerable movement from the side of End Buyers, who seemingly have adopted more of a “wait and see” mode, given the corrections in steel plates that have been noticed.
However, the overall market there indicates stability and could potential be ready to move on any available unit being pushed forward. In India, things remained on a negative trend, given the pressure on steel price levels, with the local currency though, remaining relatively stable. In Pakistan, local Buyers seem to be in no rush to push things forward (despite the recent improvements noted there in steel prices), as they seem more interested to cautiously follow the pace of their main competitors. Finally, for other demo destinations, the Turkish market seems to still be in relative disarray as part of the problematic state of the Turkish Lira”.
Nikos Roussanoglou, Hellenic Shipping News Worldwide