This week has seen higher market activity and more deals getting sealed than the previous week. Though the improved market fundamentals have taken the freight rates to newer heights, which is making the owners hold their vessels, thereby causing a paucity in the tonnage available for demolition, the end buyers are willing to offer premium price to get hold of the vessels available in the demolition market. Among the major subcontinent players, Bangladesh is having the biggest slice of the cake, followed by Pakistan and India.
The Baltic Exchange’s main sea freight index on Wednesday climbed to a near 1 year high as panamax rates scaled a more than 10-year peak this week.
Oil prices fell more than 7% on Thursday, recording their biggest one-day drop since September as the signs of faltering demand are coming from Europe and the crude oil inventories are piling up in many regions.
Chinese steel mills and traders have been preparing to shield their business from the impact of any cuts to export tax rebates on certain steel products as there are increasingly loud rumors in and out of China that the rebate cuts will be announced in a few weeks.
Most parts of the world are gearing to battle a third wave of COVID-19. Germany, Italy, and other countries of Europe enforced new lockdown measures after the spread of highly contagious coronavirus variant. India has also placed strict travel and night curfew guidelines on many of its major cities.
Even as the local steel prices continue to fluctuate daily in the range of USD 5-10/MT, the fundamentals remain strong in India with speedy post pandemic recovery. The end buyers have increased their offering price this week in line with the rising demand and Ship plate prices.
The Ministry of Mines has issued the National Non-Ferrous Metal Scrap Recycling Framework, covering key non-ferrous metals like aluminium, copper, zinc, and lead. The framework has been released with an objective to promote formal and well-organized recycling ecosystem in the country. Also, it aims to produce high quality scrap for quality secondary production thus minimizing the dependence on imports and encourage economic wealth creation, job creation and increased contribution to GDP through metal recycling.
The rising prices of ship plates is pushing the demand from end buyers to acquire tonnage. Bangladesh is offering highly competitive prices and is therefore able to secure most of the vessels that are being floated in the market.
Prices of containerized steel scrap cargoes sold to Bangladesh continued to slide as the weather conditions have improved in supplier countries and scrap inflows have increased.
The volatility of steel prices has made the end buyers eager to secure mid-sized units instead of larger vessels as they do not wish to expose themselves to higher risk in case the current demand scenario reverses.
Pakistani Rupee hits an all-year high as it closed at 156.99 against the USD on the back of higher foreign currency inflows this week, making it highest in 12 months.
Two bulkers have arrived in Aliaga this week.
Import scrap prices have softened by around USD10/MT compared to last week.
Turkish central bank has sharply increased the interest rates by 2% in a move aimed at halting a slide in Lira. The currency climbed more than 2% to TL 7.31 against the USD following the decision.