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GMS Week 33 – GRIM READING!

Prices across the subcontinent markets have been rocked by the shocking deterioration of local steel plate prices & currencies (especially in India) and the immediate / short term outlook for the various recycling markets certainly seems grim.

Demand has reached its lowest point of the year, whilst end Buyers survey the wreckage of these most recent declines. Unsurprisingly, a very limited number of transactions have reportedly taken place over the last few weeks, with Cash Buyers trying to control and deliver previously concluded vessels that were purchased at much higher rates.

To an extent, this drip-feed of tonnage has mercifully coincided with a declining supply of vessels and in turn, avoided subsequent fixtures of cheaper / lower priced units, thereby establishing greater loss-making benchmarks for the older / more expensive unsold units. As it stands, even Ship Owners who are testing the waters remain reluctant to finalize sales at the new lower and unappealing realities in the mid USD 300s/LDT and they too seem to be waiting / hoping for a return on prices above the USD 400/LDT mark.

Further out West, despite its newfangled stability, the Turkish market too has been struggling to acquire tonnage and keep local yards busy, amidst this excruciating shortage of tonnage.

The problem is that given the current trend, any bounce back (at least in the short term / within the next month) seems increasingly uncertain, despite the traditional post-monsoon recovery that is often seen in the recycling markets at the onset of the fourth quarter of the year. Global economies too – particularly in the U.S. and China – continue to revise their growth expectations amidst fears of trade wars & subsequent recessions, while the economies in both Pakistan and India have similarly been struggling since the election victories of both Imran Khan and Narendra Modi.

For week 33 of 2019, GMS demo rankings / pricing for the week are as below.

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Source: GMS Weekly

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