The market conditions are quite conducive for Ship owners who are considering to offload their aging vessels as the prices being offered are on a continual rise due to firming steel demand across the globe. The interest among End buyers is very high for vessels with prompt delivery due to the upcoming Ramadan festivities.
A strong rebound in global steel demand and supply cuts from China due to environmental concerns are major factors keeping sustained buoyancy in international steel prices.
The OPEC+ agreed on Thursday to gradually add back some 2 million barrels per day of oil production from May to July, moving cautiously in pace with the recovery of the global economy from the COVID-19 pandemic. The OPEC members face conflicting pressures as raising production before the increase in demand will lead to fall in prices but the lower production levels deprive national budgets of money in the ongoing difficult times.
The Suez Canal authorities have increased transits close to their daily maximum limit to clear the massive backlog on one of the world’s busiest trade route caused due to dislodging of containership Ever Given.
Market remained buoyant throughout the week but the buyers are still reluctant to offer high prices for securing tonnage as the market usually witnesses a downfall after such a steep spike. The end buyers are picking up vessels which are naturally destined towards Alang such as those meant for Green Recycling, Stainless steel tankers, Offshore assets etc.
Sharp spike in COVID-19 cases and stricter lockdowns may hamper the demand in the upcoming month. India was witnessing a steady improvement in economic indicators over the past few months but a renewed surge in infection once again poses a threat to economic activity and investor sentiments.
Though Bangladesh is still leading the subcontinent market by offering highest prices, the market saw a slight downturn towards the end of the week. The buying interest for prompt delivery vessels is quite high due to the upcoming Ramadan season.
Bangladesh Steel Manufacturer Association (BSMA) has been expressing grave concerns and has written to Chattogram Port Authority (CPA) about the unusual delay in berthing the raw material carrying ships. The mills are not getting timely supply of raw materials while the importers have to pay huge demurrage to shipping companies for the excessive berthing delay.
The strengthening of Pakistani Rupee is giving the required boost to the purchasing power of End buyers especially for vessels with prompt delivery. Rupee has hit nearly 2-year high and is currently trading at Rs. 152.29 per USD.
Strong rumours are going around in the market that the budget will have a negative impact of about 5-7% on pricing in the Ship recycling industry, it is due to be presented in the month of June and we will keep you closely posted on all latest updates.
One FPSO and a small unit has arrived in Aliaga this week.
Local steel prices are stable whereas there has been a slight improvement on import scrap prices.
Turkish Lira has continued its volatile run and is currently trading at 8.15 per USD.
Daily coronavirus infections in Turkey have hit an all-time high on Thursday by touching 40k mark. Government has once again introduced tight restrictions and night curfew to curb the surmounting cases.