World’s leading cash buyer of ships for recycling Best Oasis Limited projected market report:
The ship-recycling industry in Bangladesh currently finds itself in a rather unfavorable situation. On April 26, the Ministry of Forest Environment and Climate Change issued the Environment Protection Regulations-2023, reclassifying the ship recycling sector from ‘orange’ to ‘red’ category. As a result, the sector is facing considerable challenges, limiting the supply of scrap iron to the country’s re-rolling mills. In the meanwhile, the Bangladesh Ship Breakers and Recyclers Association (BSBRA) has pleaded with the government to reclassify the ship recycling sector (SRI) to ‘orange’.
The Environmental Conservation Rules-2023 require that every ship get secondary permission from the office of the Director General of the Department of Environment (DOE) before it is dismantled. As a result, acquiring authorization for ship recycling operations will take an additional one and a half to two months. The owners of ship recycling yards stated that, although the business is progressing toward HKC and environmental compliance, placing the industry in the red category has placed it in jeopardy.
The United States and the European Union are currently engaged in collaborative efforts to negotiate an agreement that seeks to address the issue of surplus steel production originating from China and various other nations. As part of this agreement, the implementation of fresh tariffs is being considered as a potential measure to curb this excessive production. The proposed levies would primarily target imports originating from China that derive advantages from non-market practices. The extent of the measures, encompassing potential targets among other nations and the magnitude of the tariffs, remains under ongoing deliberation. Furthermore, it is anticipated that this initiative will establish a comprehensive structure that will pave the way for the participation of other nations in the times to come. Undoubtedly, this move possesses the potential to significantly influence the perspective and course of action pertaining to the worldwide steel industry.
The market this week continues to exhibit a promising trajectory; competitive pricing and robust operational efficiency.
• The local markets continue to exhibit a favorable trajectory amidst the ongoing strike in Mandi, Punjab pertaining to the Goods and Services Tax (GST). It is only upon the resolution of this strike that we shall gain a precise understanding of the market’s future trajectory.
• This particular market stands as the sole entity that operates in a fully functional manner, thereby possessing the capability to offer the most competitive price at the moment.
• The anticipated surge in steel demand in India is set to commence in September 2023, coinciding with the acceleration of construction activities following the conclusion of the monsoon season. This upturn is expected to be driven by the initiation of new projects, as projected by analysts.
14 September to 20 September 2023 26 September to 30 September 2023
01 October to 05 October 2023
The market is undergoing a challenging trajectory characterized by a scarcity of potential buyers.
Currently, the market for vessels is virtually nonexistent, experiencing a dearth of potential buyers. Moreover, the challenges surrounding LC issues are progressively intensifying, as buyers face a scarcity of available LCs.
• The current market circumstances are characterized by a lack of sales and a general softness. Additionally, the local market is not providing favorable conditions, further exacerbating the challenges faced. As each day passes, the situation continues to deteriorate, adding to the complexity of making a choice.
• The current trend in the exchange rate vis-à-vis the dollar is exhibiting a consistent decline, thereby resulting in an escalated local cost and a substantial decrease in demand for steel within various projects.
14 September to 17 September 2023 28 September to 01 October 2023
13 October to 16 October 2023
The market is unchanged from the previous week, with LC challenges and few buyers.
• The current market conditions mirror those of the previous week, yet with a sense of perplexity. The Pakistani rupee has appreciated against the US dollar in recent days within the open market due to a stringent crackdown on currency exchange operators, the value has transitioned from 329 to a range of 306 – 307.
• There are still challenges related to opening LCs in the market, with only a limited number of buyers having the capability to do so; consequently, they select 8-12k lightweight vessels, which are optimal for LCs.
• Furthermore, it is worth noting that buyers often experience a delay of around 4-5 days in receiving funds from their banks following the issuance of the Notice of Readiness (NOR). This practice is against the terms and conditions outlined in the Letter of Credit (LC).
• The government is making a commitment to intensify efforts in curbing illicit trade (Barter Trade) from Iran and Afghanistan, a practice that has severely impacted the local steel industry in recent months.
Throughout the month
The market remains unchanged from last week, exhibiting minimal activity.
• Within this particular segment of the ship recycling industry, the market has remained relatively unchanged, exhibiting a stable trajectory devoid of noteworthy levels of activity.
• The inflation rate in Turkiye surged to an alarming 58.9 percent on a year-on-year basis in August, representing the highest level observed since December 2022.
• The nation’s yearly inflation rate experienced a surge for the second consecutive month, rising from 47.8 percent in July, surpassing the market’s projected rate of 55.9 percent, as per the data provided by the Turkish Statistical Institute.
• The prices of imported Turkish scrap have shown a consistent level of stability throughout the course of the previous week, mostly attributable to a decrease in trading activity.
Throughout the month