LC Issues Hit Shipbreaking Market Activity in Bangladesh

World's leading cash buyer of ships for recycling GMS said that “ Some unbelievably low and unrealistic offers have started to emerge from sub-continent markets this week, and as such, both Owners and Cash Buyers would be well advised to leave ship recycling destinations alone for the time-being, especially until some sort of floor is reached and stability regains a foothold. It has become increasingly difficult to obtain any firm or serious offers from any recycling market, as currencies continue to suffer across all recycling destinations and steel endures further volatile moves this week. Workable LCs are of chief concern in Bangladesh where End Buyers are struggling to obtain any sort of financing from local banks, amidst strict and ongoing governmental regulations on precious foreign currency reserves in the country.” GMS said “On the rare occasion when an End Buyer is able to open a workable LC in Bangladesh (mostly on smaller LDT tonnage), the numbers offered are so pitifully low, it’s nearly instantaneous to see tonnage withdrawn and re-directed towards competing markets. We have even seen Local Recyclers attempting to fix deals with Cash Buyers and Owners, subject to them obtaining approval from their financing banks within 3-4 days, which of course is never going to work and will see Bangladesh deprived of any meaningful tonnage until the end of the year - or at least until some sort of stability is seen.” GMS also said “Finally, at the far end, after holding on and displaying some sort of stability (even though it’s in the dumps), things couldn’t get worse for Aliaga Buyers as steel prices took a small tumble this week and the Lira gradually slips further.” GMS concluded “Overall, the economic situation across the recycling destinations remains precarious, with currencies weakening by the day and a shortage of US Dollars in those countries, governments and banks are failing to sanction suitable financing for a ship recycling that they do not see as imperative under the current climate.” GMS Price Assessment – India, Bangladesh & Pakistan – Week 44 Down USD 20Dry Bulk – USD 530-540 per LDTTankers - USD 540-560 per LDTContainers - USD 550-570 per LDT

LC Issues Hit Shipbreaking Market Activity in Bangladesh

Related Stories