World Economic Forum hosted a session on “Accelerating the Race to Zero Emission Shipping" where IMO sent a clear signal that it is high time to start adopting new technologies, new fuels and innovation to support zero-emission of shipping. IMO will incentivize the adoption of alternative renewable fuels by shipping companies.
Huge opportunities have shown up for Scrap metal market with introduction of stricter environmental quality standards set for international steel industries. The global demand for scrap metal will continue to increase as there will be a decline in production of new steel from iron-ore due to stringent norms.
There are talks in the market that European Commission is reviewing EU rules on export of metal scrap. We might see a restriction or ban on the export of metal scrap outside of EU. One nation that will not get affected is the United Kingdom, as it has officially left the EU and will end its transitionary membership period on January 1, 2021.
Global markets are looking forward to the President-elect Mr. Joe Biden’s approach to the domestic and foreign policies.We hope it will reduce the currently prevailing uncertainties and fears in global trade affairs.
The global economy now faces considerable downside risk owing to the surge in infections in both Europe and the United States.This has the potential to significantly curtail activity in consumer-facing industries.However, the manufacturing sector appears to be resilient despite the outbreak.
Two major pharma players announced that their coronavirus vaccine is more than 90% effective in preventing COVID-19 infection.If it turns out to be an effective solution to this pandemic, it may lead to a V-shape recovery in the market.
Domestic recyclers are showing keen interest for specific type of vessels,such as Offshore vessel, Stainless steel tankers and promptly deliverable candidates.
It is expected to be a slower period at yards this week as most of the labourers will return to their native for Diwali festivities. Yards will focus on the tonnage they already have in their hands.
Market sentiments remain bullish for importation of containerized HMS and traders are expected to soon go long in booking tonnage post Diwali celebrations.
Most of the offices in India will remain closed this week on account of the auspicious Hindu festival of Dhanteras and Diwali. It is celebrated throughout the country with great fervour.
The Ministry of Shipping is being renamed as Ministry of Ports, Shipping and Waterways. Indian government is focusing on creation of a port grid besides development of waterways and coastal shipping.
Government is taking steps to pull out Indian economy from its historic contraction by introducing fresh round of stimulus. The cabinet approved a proposal to provide production-linked incentives over five years to manufacturers in 10 sectors.
India's energy demand is beginning to improve as businesses reopen. With India becoming a key driver of demand recovery, it is asking OPEC to remove pricing anomalies as they offer deep discounts to European consumers whereas Asian buyers such as India and China are driving the demand growth.
The Cartel is now looking for larger tonnage as both India and Pakistan are not on aggressive mode. Cash Buyers are now pinning their hopes on Bangladesh as the Cartel is buying vessels at good prices. It would be intriguing to watch how they keep up with their current performance level!
There is a growing dissent among the Ship Recyclers as they are unable to buy preferred tonnage directly from the Cash buyers because the Cartel works on Lottery system and buyers are not sure of getting the vessel. Though the Cartel was formed with an intent to cap prices and benefit recyclers, they still have to buy at the market levels. In a nutshell, the recyclers have to give up their free market rights without any financial gain. Recyclers are also under pressure as no stock is available in the yard.
Due to onset of winters and shortage of ferrous scrap in the European markets, the domestic recyclers will be more than keen to book vessels at better prices to cater the demand of their domestic mills.
The British government announced that goods from Bangladesh would continue to enjoy duty-free access to the UK even after the end of Brexit transition period. It is a welcoming news for the country’s exporters who have been on edge given the emerging second wave of COVID-19 cases in many parts of the Western world.
There is a strong rumor among the recyclers that market price will collapse due to poor demand for end products. This has led to buyers being onwatch mode and looking for cheaper assets.
Pakistan has been witnessing consistent strengthening of its currency due to the following main reasons:
1. Receipt of workers’ remittances remains on the higher side as overseas Pakistanis continue to send money through official banking channel due to restricted international travel.
2. The strong check being kept by domestic authorities over illegal transfer of funds to and from Pakistan to come out of the grey list of Financial Action Task Force (FATF) which helped to ramp up remittances through the official channels.
Pakistan has been seeing a steady rise in the coronavirus cases with officials acknowledging that the second wave of the COVID-19 has arrived in the country.
Government has issued fresh restrictions in a bid to control the rapidly rising second wave of coronavirus infections across the country.
It has been a busy week at Aliaga with two small units arriving at the yards.
Import scrap is at USD 305-310/MT which is about USD 10/MT higher compared to the last week. Turkish scrap imports are expected to remain supported considering tighter supplies ahead.
Steel Prices have improved locally, and USD/TL is trading around 7.64 after hitting an all-time low of 8.5 last week.
The Finance and Treasury Minister resigned last week citing health issues. This resignation came amidst an economic crisis for Turkey as the value of the Turkish Lira fell sharply against the US Dollar. Lutfi Elvan has been appointed as the new Finance and Treasury minister.
There has been signs of Lockdown with restriction being placed on elders over 65. They are now allowed to venture out only between 10:00-16:00 hours.Other restrictions are expected to follow soon.
COVID-19 cases are continually on the rise with more than 2,800 cases every day.