The era of stability is long gone with global economy facing multiple shocks, each one having a domino effect across all the industries. As the risingenergy and food prices continue to hurt the forex reserves and cause devaluation of currencies in the major recycling destinations, the offer pricesfrom end-buyers are still not rebounding to previous levels. On the other hand, all categories of vessels are more or less enjoying healthy freightrates, making it unlikely for owners to consider retiring their aging assets. It remains to be seen if this extended period of inactivity in the shiprecycling industry is a short breather or a warning for worse to come!
China’s steel industry is entering a precarious new era as a worsening property crisis imperils demand. Almost a third of China’s steel mills could gobankrupt in a squeeze that’s likely to last five years, Li Ganpo, founder and chairman of Hebei Jingye Steel Group, warned at a private companymeeting. With property having lost its mantle as the preeminent growth driver, key commodities like steel no longer have the benefit of endless creditaccess, increasing the risk of mill closures across the country.
US-China tensions mount after US House Speaker Nancy Pelosi's visit to Taiwan as China claims Taiwan as part of its territory, and views visits byforeign government officials as recognition of the island’s sovereignty. Chinese foreign ministry said Washington's betrayal on the Taiwan issue isbankrupting its national credibility and announced cancellation of several defence meetings with the United States alongwith sanctions against NancyPelosi and her immediate family members.
The Bank of England has warned the UK will fall into recession as it raised interest rates by 50 basis points, its largest single increase the most in 27 years.
There is a desire to secure tonnage, but the end buyers are not willing to gomuch higher with the offer prices due to volatile prices in the domesticmarket and continuously declining demand for Indian steel in key exportdestinations due to competitive prices from China, high export duty and aslowdown in global steel consumption.
After receiving multiple industry representation to reduce or eliminate theexport duty on steel products amid falling prices and rising domestic supply,the Steel Ministry has finally taken up the matter with the Finance Ministryand an announcement may soon be made on this matter.
India is planning to start a carbon trading market for major emitters in the energy, steel and cement industries, as part of its efforts to hasten thetransition to cleaner fuels. The platform is likely to be announced by PM Narendra Modi at Independence Day celebrations on Aug. 15
The end buyers from Chattogram are seeking small-sized vessels to fill their emptying yards as the exchange rate for LC trade reached BDT 112.15/USD. Even at higher rates, none of the banks worldwide are willing to accept Usance LC from Bangladesh and very few buyers have the ability to make sight payments, resulting in a virtual standstill in the recycling market.
Bangladesh may face three years of rolling power cuts due to the ongoingglobal gas crunch, Bloomberg reported this week. The country struggles tosource long-term natural gas supplies and finds the spot market tooexpensive to meet its needs.
Increasing production costs and lower margins from finished steel saleskept the market sluggish this week. Furthermore, the Muharram Ashuraholidays ahead may keep the domestic market activities quiet in thecoming week as well.
The offer prices from recyclers of Gadani have improved due to very limited availability of scrap in the domestic market and improvement in the interbank exchange rate. As many recycling yards have already run out of inventory, the end buyers are willing to bid competitively and match the levels offered by their counterparts from India to secure tonnage but unfortunately there are no units available in the demolition market.
Pakistan's Finance Minister announced today that the government wouldcontinue to curb imports for the next three months, as he warned of "baddays" ahead for the cash-strapped country. He further stated that thecurrent government has to save the country from a possible default andneeds to take immediate and short-term measures.
Due to heavy rains across many parts of the country, the market for finishedsteel has been slow. However, mills have raised rebar prices on the back ofcontinuous devaluation of PKR, increase in energy costs, and rising inputcosts.
Imported scrap offers have strengthend by about USD 5-10/MT whereasthe domestic steel demand and prices remain the same as previousweek with no signs of improvement due to subdued buying activities.
Turkish inflation rose to a fresh 24-year high of 79.6% in July, datashowed this week as Lira's continued weakness and global energy andcommodity costs pushed prices higher.
A Turkish port facility owned by MMK Turkey, which is also known ammo Metalurji Port, has been sanctioned by the US for being linked to Viktor Filippovich Rashnikov, the head of Russian iron and steel giant MMK.