Markets - Recycling - Hope of a firming market

Feb 15 2019


After an extended period of withering optimism, last week, several sales at strangely high numbers appeared to suggest that certain cash buyers were confident of a return to a firming market.

India and Pakistan have been down in the dumps for a better part of two months, whilst Bangladesh has been securing a majority of the market tonnage, GMS said in its weekly report.

However, as demand and capacity started to swiftly dwindle in Chittagong, the timing for competing markets to step up and take their share of the available tonnage was ripe.

Apart from offshore units and green tonnage (secured on the whole for well below $400 per ldt), the Indian port report was starved of vessels of late and Pakistan had been all but barren since the Pakistani Rupee fourth quarter crash last year.

A large number of container vessels have been sold since the onset of 2019 and particularly for Panamax sized units (of 20,000 ldt and above). As a result, the number of end buyers capable of opening such large value L/Cs (especially in Bangladesh) has started to run dry.

Turkey has finally started to have a mini-resurgence, as local steel plate prices continued to firm up and local offerings improved last week.

It is therefore inevitable that the focus of the industry will start to shift to other recycling destinations (from Bangladesh), albeit at lower levels, GMS concluded.

The only tanker sale reported recently by brokers was that of the 1992-built MR ‘Golden Star’, which was reportedly bought by Bangladesh interest.

 



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