GMS Week 28 – DOUBLE DOWN!

The anticipated / ongoing seasonal slowdown in activity coupled with softening vessel prices has clearly started to characterize the year’s summer / monsoon mess across the Indian sub-continent ship recycling markets. However, the 2024 version not only includes the incessant rains and a holiday-time for yard workers, but also ongoing global descent via boots on the ground warfare & an economic tumult that has double downed and unsustainably maintained negative pressures on prevailing macro-economic problems facing our world. At the global stage, problems in Ukraine & the Middle East increasingly take center stage as not only is Ukraine’s entry into NATO irreversible at this stage, but it will also bear witness to NATO Allied Forces (including the United States) ensuring the security for the State of Ukraine as per the terms of NATO’s agreement. Additionally, Israel’s recent strikes near Khan Younis that led to the unfortunate passing of scores of refugees, further threatens the delicacy of ongoing peace talks between the U.S. and the leaders of Hamas. As has been the case and will continue to be, retaliatory attacks by Houthis in the Red Sea lanes will keep further pressure on international logistics / freight rates on transiting merchant vessels that are destined into Med waters, further exasperating the current state of inflation.

At the micro end of things, key fundamentals at the various ship recycling locations also reported their own shares of stutters as not only did local steel plate prices in India and Bangladesh weaken in unison this week, but the U.S. Dollar also continued to dominate against recycling nation currencies as even though some were held in a weakened state, others suffered record declines this week. Yet, on the back of no market units being on offer for a recycling sale, a marginal number of vessels surprisingly arrived the various waterfronts this week, including Pakistan, where a small LDT unit graced Gadani’s waterfront.

Overall, recent bad news has largely been delivered to the industry via the results of the various elections and subsequent budgets in each country, which have seen sentiments and vessel prices cool by about USD 25 / LDT over recent weeks. Changes in Bangladesh’s budget also levied further duties on the fuel onboard incoming recycling vessels, coupled with growing concerns on U.S. Dollar reserves in both Chattogram & Gadani. Worries of PM Modi also failing to preserve a majority government through India’s recent General Elections are likely to erode the mindset of local recyclers, at least until the budget is announced in a little over a week from now. Finally, as there remains a serious shortage of recycling candidates as we pass the midpoint of the year, it is expected to remain quiet through much of Q3 ‘04 as all sectors still perform admirably.

For week 28 of 2024, GMS demo rankings / pricing for the week are as below.

Source: GMS,Inc. https://www.gmsinc.net/gms_new/index.php/web