Following the recent dramatic price plunges which have seen almost $100/LDT wiped off prices, the ship recycling industry in the Indian sub-continent seems to be taking a bit of a pause, as end buyers remain less than confident to offer any firm prices with certainty, according to GMS.
Adding to the frustration is the minimal number of candidates currently available to work on, such is the bullish state of all freight sectors. Accordingly, we may see a prolonged summer/monsoon lull across all sub-continent recycling locations.
On the West end, Turkey is far worse off with its plummeting steel plate prices (both import and local) and a currency that has shaken the local market to a standstill, with no new arrivals or even news of fresh deals as local offerings are firmly below the $300/MT mark.
As such, given the state of global currencies, which continue to depreciate against the U.S. Dollar, in addition to soaring inflation, it would not be surprising to see minimal or virtually no deals concluded to end buyers for the next few months.
Even those vessels sold to cash buyers at recycling equivalent prices today are seeing previously unthinkable trading opportunities at fantastic levels, and those older assets are now being passed through drydock, so firm are chartering rates at present.
This is (inevitably and expectedly) leading to pent up demand for recycling units as most plots are increasingly turning dormant and are in dire need to acquire vessels in order to fulfill L/C limits with banks.
Local banks are also becoming tougher on granting fresh L/Cs (particularly for larger LDT vessels) and this is leading to end buyers having to put up larger securities in order to obtain the necessary financing for new units.
For week 24 of 2022, GMS demo rankings / pricing for the week are as below.