The demolition prices have taken a hit due to volatility in global steel prices, the uncertainty of tax implications from newly announced Budgets, and ongoing monsoon season in the subcontinent market. Both Shipowners and Recyclers are being reluctant to make new offers as they want to gauge the direction of prices. We believe the prices will maintain their ground as very few vessels are being offered for sale and there is a constant shortage in supply of tonnage.
Spain is the latest country to join the Hong Kong Convention for the Safe ad environmentally sound recycling of ships, informs International Maritime Organization through a press release on Tuesday.
Chinese steel remains at a deep discount in comparison with EU and US markets, fuelling concerns that Beijing may soon add export taxes as a way to keep more steel in the domestic markets and limit domestic crude steel output.
Oil rose to the highest in over two years and touched $72.85 a barrel backed by higher-than-forecast U.S. inflation data and a strong demand outlook.
Soaring demand, container shortages, port congestion and crew change issues have quadrupled the ocean freight in a matter of months. The situation has blown out to a massive extent leading to heavy inflation in cost of imported goods.
The market is gradually coming back into business, but the recyclers are relatively silent in offering prices. They are looking for vessels with specific content and those destined for green recycling. The demand outlook is positive as Indian export inquiries have increased in the Asian market due to strong news of potential Chinese steel export tariff.
Major industry associations are demanding a regulatory body to cap the steel prices as they have gone from USD 575/MT in October 2020 to USD 1175/MT in June 2021, a more than 100% increase in 9 months.
As Covid cases continue to fall, many Indian states that have been virus hotpots are gradually easing restrictions in phases and with conditions.
Demand from end buyers of Bangladesh has temporarily slowed down. In the domestic market, the trade activities decelerated post Budget announcement last week on 3rd June.
Steel and scrap market observed mixed sentiments this week. Prices of imported scrap moved up while the steel mills in Dhaka lowered their prices on demand concerns as traders are less inclined to buy during the monsoon season.
The impact of reduction of Tax deducted at source on the supply of iron and iron products from 3% to 2% in the Budget will not be felt much in the industry amid the soaring prices.
The end buyers from Pakistan have been most active this week and have shown a strong inclination towards larger units. As the new Budget will get implemented from 1st July, the buyers are eagerly looking for vessels which can be delivered before 30th June.
As we write this, the Finance Minister of Pakistan is presenting the Budget for F.Y. 2021-22 which is expected to focus on economic growth, improved employment, pandemic support measures and managing fiscal imbalances.
We will get clarity on the budget by tomorrow but from the latest updates, the import duty on raw materials has been reduced. If there is no major impact from the Budget, the end buyers from Gadani may lead the price board in the upcoming week.
One Dredger of about 6000 LWT and a Research unit of about 3000 LWT has arrived in Aliaga this week.
Import scrap prices have increased by USD 5/MT whereas the domestic market remained stable.
Turkish Lira rallied 2% on Thursday to its strongest level in two weeks, boosted by U.S. bond markets, and is currently trading at TL 8.33/USD.
Covid cases are at 6k levels. The curfew will remain valid for Weekends and between 22:00-05:00 for weekdays until the end of June.