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GMS Week 44 – DISTRESSED AND DEPRESSED!

This week, the rot seems to have well and truly set in once again, as all subcontinent markets turned in another negative and lackluster performance, in what has (recently) been turning into an overall woeful fourth quarter of the year. After the constantly declining markets over the summer / monsoon months, many in the industry had been expecting (hoping for) some sort of return to form.

On the contrary, what we have witnessed of late has been nothing but further falls that have capped off an incredibly poor second half to the year, for all subcontinent recycling destinations. Declines nearing USD 100/LDT (and in excess in some cases) have been witnessed across all subcontinent locations, given that the markets had been trading well into the mid-to-high USD 400/LDT early in the year, in what was a stellar and busy start to 2019.

Yet, the strange thing is that trading markets across all sectors (of late) have been performing rather well, and so, coupled with the distressed and depressed recycling markets, very few vessels have been introduced for recycling over the recent past, despite the onset of the new low Sulphur regulations that are due to come into effect from January 1, 2020.

Notwithstanding, this has still not restrained Cash Buyers from overtly speculating on units at above market levels, on any of the tonnage that was sold over the recent months, including a VLCC and a raft of larger LDT units, all of which look to certainly garner losses for the concerned parties. Moreover, on the larger LDT units (and even some smaller vessels for certain recyclers in India), banks remain reluctant to sanction fresh L/C limits once again; in what has been a loss making industry for most Recyclers through 2019.

Overall, fundamentals remain weak across the subcontinent markets, with steel plate prices having lost about USD 80/LDT in India and (though comparatively less in) Bangladesh, currencies having depreciated by over 2% in Pakistan & India, and demand overall lacking in the subcontinent markets altogether.

For week 44 of 2019, GMS demo rankings / pricing for the week are as below.

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Source: GMS Weekly

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