According to the shipbroker, “the three recycling destinations in the Indian sub-continent are really suffering from the monsoon rains with flooding throughout the areas and our thoughts are with those that are currently witnessing the dreadful weather and consequently, the actual /dismantling of any vessel on the yards has slowed considerably, thus reducing the supply to the steel mills. This may therefore aide further improvements in steel prices in future months which should enable price levels for ship steel to improve further. Pakistan is the one area where negative sentiment remains, although hereto, we believe the market has reached the lowest point in relation to pricing”, Clarkson Platou Hellas concluded.
Meanwhile, GMS , the world’s leading cash buyer of ships said that “given that there are a bare minimal number of even potential candidates floating around for End Buyers to work with, recycling markets appear to be settling for now, at levels well below USD /LDT for the most part – a negative differential of about USD /LDT from the peaks witnessed earlier this year. Currencies continue to depreciate across the globe and hit respective historical lows, as some dismal performances (primarily from Gadani Recyclers in the recent past), have left Owners and Cash Buyers nervous to touch this market whilst the situation remains so precarious. Fortunately, firm freight markets continue to deprive the recycling industry of any meaningful tonnage and this is likely to continue for (at least) the next few months ahead.
The summer / monsoon months are traditionally quieter due to the constant rains & tropical storms that tend to afflict the area resulting in slower cutting times of vessels during downpours. As such, labourers return to their hometowns as yards are ‘naturally’ condemned to a period bereft of activity. Notwithstanding, we have yet to see things get this quiet for many a year now. The political (and now turning into a financial) collapse witnessed recently in Sri Lanka is also rattling sub-continent nerves, amidst fears from both the weaker Pakistan and Bangladeshi economies who feel they could well be next, as their respective currencies and the painful lack of available steel plates (that eventually affect domestic improvement and construction projects), all converge to an economy being suffered by the unfolding of times. The only market that is displaying a degree of stability (at least where plate prices are concerned) is Turkey, with both import and local steel reporting no major changes through the course of the week. Indian and Pakistani port reports too remain empty as recycling yards gradually turn barren across all of the major recycling destinations, whilst industry players hope for some stability and improved sentiments in the weeks / month(s) ahead”, GMS concluded.
