Despite falls of over USD 100 LT LDT in the demo markets over the past six weeks or so, and an overriding air of despondency amidst continuing falls in prices, deals continued to be concluded as owners proved themselves to be more than willing to sell at the lower levels.
Several deals on dry vessels were done in the 350s and 360s/LT LDT in the sub continent the clearest sign yet that this new reality on prices is here to stay (at least for now). Indeed India has become so close in prices to China that many vessels are no longer making their way over to the sub-continent.
With a continually steady and willing supply of vessels mixed in with weak local fundamentals (both currency and steel prices), there appears little hope of prices improving any time soon.
Certainly, with several months left for the monsoon season to run, it may be that prices remain relatively stagnant through August 2012 at the earliest, when there tends to be the traditional uptick in prices.
Making matters worse, with freight rates still subdued and many vessels struggling to breakeven, let alone make any money, the supply of vessels is expected to continue through the summer. However, with cash buyers frequently burned over the course of the falls (when every day prices were lower and losses increased), offers may be on the conservative side in anticipation of potentially further falls ahead (especially from India).
What is needed is some stability in the market several weeks of no volatility in currency or steel prices after which, a base could be established for increased buying activity gains in the future.
As of now, for week 25 of 2012, GMS demo rankings for the week are as below:
|Country||Market Sentiment||GEN Cargo Prices||Tanker Prices|
|Bangladesh||Weak||USD 380/lt ldt||USD 400/lt ldt|
|Pakistan||Weak||USD 370/lt ldt||USD 400/lt ldt|
|India||Weak||USD 360/lt ldt||USD 390/lt ldt|
|China||Weak||USD 350/lt ldt||USD 370/lt ldt|
Source - GMS Weekly