Ship Breaking Activity Quietness as Price Outlook Uncertain

World's leading cash buyer of ships for recycling GMS said that “As sales dry up into sub-continent markets due to firming freight rates and plummeting vessel prices, the industry is once again entering a lull, especially as the traditionally quieter summer & monsoon months descend. At this time, we do not anticipate Ship Owners or Cash Buyers to offload any of their inventories, if vessels are even available, at these reduced rates and End Buyers still remain reluctant to commit units at any firm numbers being demanded, such is the volatility in the market at present. There have not been any sales to benchmark this recent fall in levels, but depreciating currencies and plummeting steel plate prices seem to have knocked over USD 100 per LDT off across the sub-continent & Turkish markets and sentiments do appear to be shredded as nerves remain frayed. Accordingly, there have been some opportunistic numbers being dished around, far below where most in the industry believe prices should be at present, and as expected, no Ship Owner or Cash Buyer is presently willing to entertain such offers in the low USD 600 per LDT, perhaps even lower, as recycling markets stabilize for the time.”GMS also said “A gradual rebound is eventually expected, especially as supply remains extremely restricted and yards are more than empty, but just how far and how soon levels will return remains anyone’s guess. Overall, despite yard capacity improving across the sub-continent, freight sectors too have been performing admirably, thereby resulting in a suffocation of resale’s to global Recyclers. Evidence of this even presents itself at the waterfront, as local port positions are starting to dwindle with marginal arrivals last week.”GMS concluded “As such, given the historical tenacity of these pricing trends, we can expect levels and demand to pick up as we head towards the third quarter of the year, with most in the industry hoping for a sustained recovery.”GMS Price Assessment - India/Bangladesh/Pakistan – Week 12Dry Bulk – USD 600-620 per LDTTankers - USD 610-630 per LDTContainers - USD 620-640 per LDT

Ship Breaking Activity Quietness as Price Outlook Uncertain

Strategic Research Institute

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