Markets - Recycling- Pakistan shies away from wet units once more

Nov 03 2018

After the recent massive recycling sales and activity, last week seemed far more muted by comparison.

Fewer vessels were being worked and some reticence to compete was starting to emerge from the various sub-continent markets.

At present, Bangladesh is the only market firing on all cylinders. India is still marred by currency concerns, volatile steel plate prices and increasingly difficult banking requirements, the last of which is making finding capable end buyers with prompt L/Cs, a very difficult task for cash buyers these days.

Pakistan has also struggled with currency problems, with the Pakistani Rupee recently depreciated by as much as 10% in a single week. Moreover, Gadani Buyers have once again turned away from negotiating/acquiring tankers, after recent accidents, which led to the closure of the local industry to tankers and one of which led to the arrest of a yard head.

Whilst the Pakistani market does not remain closed overall, local recyclers have diverted their attention away from wet units.

Much of the ongoing supply and deals seems to be directed towards Bangladesh, given the comparatively stable market and strong local steel plate prices, which have jointly motivated Chittagong buyers to offer the strongest levels witnessed across the sub-continent markets for another week.

The overall focus in the sub-continent now seems to be on containerships (over the usual steady flow of tankers seen over much of this year) with as many as 10 units sold in the last few weeks, the strongest indicator of declining charter rates in this particular sector.

Finally, no change was reported in China’s position. Turkey reported some minor improvements in steel plate prices and further stability with the Lira, but to no effect.

Brokers have reported that Pakistan interests took the 1999-built VLCC ‘DS Velvet’ for an undisclosed price level, while the 1993-built MR ‘Oaktree’ was committed to undisclosed interests for $460 per ldt on the basis of ‘as is’ Colombo with 200 tonnes of fuel ROB.



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