Weekly Ship Recycling Report by Best Oasis World’s leading cash buyer of ships for recycling. Ship recycling : little improvement in Indian market.
(04 November 2023 – 10 November 2023)
Highlights of the Week
Best Oasis in their weekly ship recycling report stated that, we extend our sincerest wishes to our esteemed readers for a happy and prosperous Diwali, a festival symbolizing the vibrant celebration of lights. The importance of Diwali lies in its symbolic representation of the triumph of light over darkness.
During the course of this week, the ship recycling destinations saw an assortment of performances. The market in India witnessed a decline initially, but towards the end of the week, there was a little improvement. However, it is important to note that this improvement is expected to be temporary in nature. Bangladesh is facing substantial challenges related to its balance of payments, particularly in relation to its LC issues. This has become a pressing concern, as the lack of USD has intensified. Consequently, only a limited number of purchasers in Bangladesh are able to effectively navigate this situation. In Pakistan, prospective buyers are inclined to exercise patience in anticipation of a reduction in currency fluctuations and the attainment of economic stability. Turkiye seems to be witnessing a modest improvement, with a narrow margin of about 3 to 4 USD.
The price of oil is anticipated to see a decline for the third consecutive week due to mounting apprehensions over worldwide demand and regional geopolitical tensions. The recent decline in prices is seen as arbitrary since there are indications that prices may stabilize due to decreased supply and probable constraints in the Persian Gulf region.
There exists a modest improvement within this market; however, it is of a temporary nature.
- The Indian market has seen a decline, however, there has been a little improvement towards the end of the week, with prices showing a modest increase.
- According to those in the industry, the current situation is characterized by its temporary nature and is unlikely to endure in a sustained manner.
- India will remain the leading export destination for coking coal in the near future, according to the Indian Steel Association (ISA). Additionally, it is worth noting that the price surge is having a particularly severe impact on the domestic steel sector.
The market appears volatile with LC concerns becoming a sore spot.
- The local market, which experienced some volatility last week, has since subsided, with negative prices prevailing for the duration of the week.
- LCs are issued with value date payments deferred by two days, and exchange rates are causing significant problems. This reveals that the bank is in a particularly dire situation.
- It is highly recommended that sellers refrain from selling assets without doing thorough due diligence on prospective buyers.
- However, there is a good development reported in the media about the increase in the number of openings and settlements of import LCs in Bangladesh during the month of October. This growth may be attributed to the upward trend in remittance inflows and the seasonal demand for fertilizers.
LC issues continue to persist, and buyers in this market are awaiting clarity.
- The lingering concerns regarding LC remain relevant in the present situation. Local recyclers are attempting to acquire tonnage at the 500 level, but banks are once again hesitant to open LC, as they were a month ago. Already, one bank has announced that it will open LCs for January ship deliveries and payments.
- Currently, buyers exhibit a preference for deferring their purchases until the month of January, with the intention of assessing the prevailing exchange rate and the overall state of the economy.
- Local markets are experiencing improvement amid a rebar shortage caused by the closure of units in Lahore caused by smog.
- The value of the PKR is once again depreciating against the dollar. The IMF delegation is presently here in Pakistan to conduct a comprehensive assessment of the $3 billion financial assistance program.
The current state of the market exhibits a modest improvement in the present scenario.
- The market has exhibited a marginal improvement, albeit not significantly, with a fluctuation of approximately 3-4 USD.
- The unemployment rate in Turkey declined for the sixth consecutive month in September, reaching a level of 9.1%. This figure is the lowest level seen since the year 2014.
- The General Directorate of Imports of the Ministry of Commerce in Turkey has commenced a safeguard inquiry pertaining to the importation of steel wire rods. The Turkish Steel Producers Association filed the petition for the initiation of this safeguards examination to assess the potential impact of the surge in steel wire rod imports on the local sector, namely in terms of inflicting or posing a significant danger of severe harm.