Markets- Recycling - Owners hold on to tonnage

Jun 07 2019


The recycling market remained subdued during the week, despite the recent surge in optimism in India, brought about by Prime Minister Narendra Modi’s election victory.

Bangladesh remained virtually closed with the budget due on 13th June in which new duties/taxes on the steel sector are expected to be introduced, plus a week long Eid holiday, which is set to begin from early this week, signaling the end of Ramadan, GMS said in its weekly report.

Pakistan was again positioned below the $400 per ldt mark for most units and there appears to be little hope of any fresh arrivals in the country any time soon, especially after the most recent currency depreciation and the forthcoming budget on 11th June.

New candidates have dried up for the time being, with many owners unwilling to dip into the market at these lower levels. Most are willing to wait and see the results of the upcoming budgets and are hoping for a post-Eid optimism to return to the markets.

The reality is however, that most yards in Bangladesh remain full. This is hardly surprising given that most Panamax containerships, Capesize bulkers, VLOCs and other large LDT, non-green vessels have ended up in Chattogram this year.

Those end buyers that are open, unfortunately do not have L/C limits (a growing issue across sub-continent markets, due to increasingly tougher banking compliance requirements) and it will therefore take a period of significant digestion over the summer/monsoon months before the previously bullish Bangladeshi market returns to form.

Finally, the Turkish market appeared to have entered a vegetative state, whereby fundamentals were unchanged and with the festive period now forthcoming, we do not expect any changes from this market during the next fortnight, GMS said.

 

 



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