Global ferrous scrap and finished steel market is witnessing mixed trends which has made the end buyers hesitant to book tonnage at the current price levels. Buyers are expecting to see some more correction in the prices and are therefore cooling their heels before making new offers.
The ship recyclers of Pakistan are worried about the outcome of the investigation being carried out by the government against the Mercury laden Tanker that has been brought to a Gadani based ship recycling yard. The Environment department has set up an inquiry to probe into how the ship was allowed to anchor at Gadani shipyard despite Interpol’s warning that the ship contains dangerous chemicals.
We, as a Cash Buyer and a Yard owner, strongly condemn this illegal scheming conducted by few companies which is damaging the reputation of the whole ship recycling industry.
China’s steel markets remain under pressure from Beijing aiming to curb rapid price increase as high prices exert pressure on factories and threaten to derail economic recovery. Market participants are anticipating a further policy change such as higher taxes on exports to discourage steel supply going offshore.
Oil prices pushed higher today supported by firm U.S. economic data, relaxation of lockdown in European countries, and expectations of a strong rebound in global fuel demand in the third quarter.
Indian market is on the path towards recovery from the economic fallout of the second wave of the pandemic. The end buyers of India are not able to match the high prices being offered by their subcontinent counterparts i.e., Pakistan and Bangladesh.
Ship Recycling Industries Association of India (SRIA) is urging the Government to lift the ban on oxygen supply for industrial purpose as Covid-19 cases have reduced to a great extent and the suppliers have oxygen available in surplus.
Ferrous scrap import offers went down by USD 15-20/MT from previous week. Demand is expected to remain dented due to upcoming monsoon season and major consuming states still being under lockdown.
Bangladesh is the most attractive market right now as the end buyers have good appetite to secure tonnage and are offering generous prices; however, more interest is being shown towards smaller candidates and there are very few buyers offering bids for larger vessels. This has widened the price gap between mid-sized tankers and large-sized tankers.
Import scrap prices have corrected by USD 20-25/MT against offers of previous week.
More than 50 villages have been inundated by tidal surges triggered by Cyclone Yaas. Large tracts of farmland, fish and cattle have been swept away by tidal surges which has rendered more than 5000 people homeless.
The end buyers are uncertain about the reaction of authorities towards the Ship Recycling industry in Gadani due to the strong media coverage of Tanker carrying toxic chemicals. The sample of sludge has been sent to 3 private laboratories in Karachi and if the mercury levels in the sludge is found above acceptable limits as per the Minamata Convention, then a case would be registered against the buyer and the plot will be sealed permanently.
*All Tankers carrying Crude oil will have such content of Mercury depending on the location where she is loading the cargo from regularly.
The end buyers are avoiding to book tonnage at the moment due to the dwindling prices of iron ore, rebar and shredded. They are waiting for the prices to stabilize and the media attention to shift away from Gadani before making new offers.
The end buyers have slightly edged down their offers as the global scrap prices remain volatile this week.
Import scrap prices and local scrap prices have softened by USD 10/MT week on week.
Turkish Lira slid to an all-time low amid concerns over rising inflation globally and expectations in the domestic market that the Central bank will soon cut interest rates. It is currently trading at TL 8.58/USD.
Turkey managed to bring down the daily Covid case numbers to 8700, a considerable drop from 50,000 daily cases last month. Authorities have signalled a gradual normalization process starting from June 1.