Markets - Recycling - Negative territory

Nov 08 2019

The rot seemed to have well and truly set in once again last week.

All sub-continent markets saw another negative and lacklustre performance, in what has recently been turning into an overall woeful fourth quarter of the year, GMS said in its weekly roundup.

After the constantly declining markets during the summer/monsoon months, many in the industry had been expecting some sort of return to form. 

However, further falls were seen of late capping off an incredibly poor second half to the year, for all sub-continent recycling destinations.

Declines nearing $100 per ldt and more in some cases, were witnessed across all sub-continent locations, given that the markets had been trading well into the mid-to-high $400s per ldt earlier this year.

Yet, trading markets across all sectors lately have been performing well, and so, coupled with the distressed and depressed recycling markets, very few vessels were introduced for recycling recently, despite the onset of the new low sulfur regulations that are due to come into effect on 1st January, 2020.

However, this still did not restrain cash buyers from speculating on units at above market levels, on any tonnage sold in recent months, including a VLCC and a raft of larger ldt units, all of which will almost certainly garner losses for the concerned parties.

Moreover, for the larger ldt units (and even some smaller vessels for certain recyclers in India), banks were reluctant to sanction fresh L/C limits once again; in what has been a loss making industry for most recyclers through 2019.

Overall, fundamentals were weak across the sub-continent markets. Steel plate prices lost about $80 per ldt in India and in to a lesser extent in Bangladesh, currencies depreciated by over 2% in Pakistan & India, and demand was completely lacking in the sub-continent markets.

Turkey is the only market of late that has registered positive movements, with both local fundamentals (especially local plate prices) reported noteworthy increases, GMS concluded.


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