GMS Market Commentary on Ship Breaking in Week 10
World's leading cash buyer of ships for recycling GMS said that “The upward trajectory has continued in most sub-continent markets this week particularly
World's leading cash buyer of ships for recycling GMS said that “The upward trajectory has continued in most sub-continent markets this week particularly in a resurgent Bangladesh, where local steel plate prices are at the highest levels they have been all year. India too remains positively poised, but Pakistan has started to cool off again after several purchases in the high USD 400s/LDT were seen last week, including the highest priced VLOC sale seen over recent years and one Panamax Bulker at USD 480/LT LDT. Just as Bangladesh enjoyed a sharp upwards spike earlier in the year followed by a swift crash, it appears that the subcontinent recycling markets are poised for swift and sharp corrections this year, which often tends to leave Cash Buyers exposed on any unsold inventory that was not immediately committed on a back-to-back basis. Even if units are sold immediately onwards at top prices to sub-continent recyclers, until an L/C is released and the vessel is beached, there is no firm assurance on the potential performance of the buyers as we have seen all too often in the past.”
On the other end, the Turkish market, though marginally weaker from a local fundamentals perspective, has yet seen local prices improve by about USD 10/MT, in light of the recent improvements in local fundamentals.
Overall however, fundamentals are changing at such a rapid rate that it makes any call on the future market nigh impossible, especially with ‘black swan’ events like the Covid-19 pandemic resetting markets with a seemingly greater frequency. Therefore, going with a strong and renowned / reliable cash buying counterparty should be a priority for owners in these most challenging times, particularly as we have witnessed two of the better known Cash Buyers disappear from the market for rather unsavory reasons in the last year alone.