Highlights of the Week
In evaluating the four ship recycling markets, it is evident that India has exhibited superior performance in comparison to other destinations. Conversely, Pakistan has encountered a predicament characterized by cautiousness and indecision among buyers, primarily due to the fluctuating currency exchange rates and the recent strengthening of the Pakistani Rupee (PKR). Bangladesh continues to confront the persistent challenge of the LC issue, yet there is a glimmer of hope for approaching a resolution. Meanwhile, Turkiye remains characterized by its customary state of limited activity.
The OECD issued a cautionary statement in its most recent Interim Economic Outlook, highlighting the potential impact of enduring inflation and a decline in China on global economic growth, despite a somewhat stronger performance in the first half of 2023. The global GDP experienced an annual growth rate of 3.2% during the first half of 2023, in comparison to the latter half of 2022. Consequently, OECD revised its prediction for the year 2023 from 2.7% to 3%. Nevertheless, it is important to note that an elevated level of economic growth in the first six months of 2023 does not always indicate overall stability in the global economy. OECD revised its growth projection for the year 2024, reducing it from 2.9% to 2.7% compared to its previous estimate in June. The prediction was hindered by inflation and China’s slow recovery.
Germany, which was formerly seen as a prominent exemplar of prosperous endeavors, is now experiencing a decline in its economic performance, positioning it as the most underperforming major developed country worldwide. Both the IMF and the EU have projected a contraction in Germany’s GDP for the current year. It is noteworthy to mention that the cause of this situation is the invasion of Ukraine by Russia and the subsequent deprivation of Germany’s access to affordable natural gas from Moscow. This event has had an unparalleled impact on Germany’s energy-intensive industries, which have traditionally served as the industrial stronghold of Europe. As previously reported in our weekly reports, it is crucial to acknowledge that the deceleration of China’s economy will have an impact on other economies as well. This is true in the present context as Germany faced another setback when its crucial trading partner, China, saw a deceleration in economic development after many decades of robust expansion.
USD / INR USD / BDT USD / PKR USD / TL
This Week : 82.94 Previous Week : 83.03 Gained : 0.09
This Week : 109.69 Previous Week : 110.20 Gained : 0.51
This Week : 288.30 Previous Week : 296.94 Gained : 8.64
This Week : 27.15 Previous Week : 26.98 Lost : 0.17
The market continues to grow and there is interest for small
The local market exhibits strong performance, with significant buyer interest observed for tonnages ranging from 7,000 – 10,000 LDT levels.
However, for larger tonnages, buyer interest diminishes due to the limited availability of 200 LCs. This is attributed to the conservative approach adopted by Indian banks, resulting in reasonable or normal credit limits for buyers, leaving a limited pool of potential buyers for larger vessels. Consequently, the escalating costs of vessels add to the financial strain experienced by prospective buyers.
The Indian economy exhibits a favorable outlook across various dimensions, thereby instilling optimism for the steel industry in the upcoming months. One prevailing concern pertains to the insufficient increase in local consumption, which falls short of the desired levels. This issue is compounded by elevated interest rates, thereby impeding certain aspects of growth.
26 September to 30 September 2023
01 October to 05 October 2023
14 October to 20 October 2023
The market is subpar and the local market is declining, but respite may be on the horizon.
The local market has been closed down by the association in order to drive up price levels, thus there is less interest in buying new tonnages, and the buyer viewpoint is still 400, 470/80 for bulkers.
The current state of the markets in this region is suboptimal, characterized by a consistent decline in the local market on a daily basis with little changes.
The issue of LC in Bangladesh continues to exist; however, there are indications that foreign institutions are beginning to discount LCs issued by banks in Bangladesh, suggesting a potential improvement in stability.
According to the report “Asian Development Outlook (ADO) September 2023,” the somewhat quicker growth prediction reflects an increase in domestic demand and improved export growth. Inflation is expected to fall to 6.6% in the current fiscal year
28 September to 01 October 2023
13 October to 16 October 2023
27 October to 30 October 2023
The current market is exhibiting a sense of caution and is adopting a wait-and-see approach.
The PKR to dollar index has experienced a decline, causing concern among buyers due to the decreased index. As a result, there have been no new transactions thus far, as recyclers are contemplating the potential decrease in prices. The drop in local steel prices can be attributed to the appreciation of the Pakistani Rupee (PKR) against the United States Dollar (USD).
The dilemma is such that when the exchange rate was skyrocketing, they still did not purchase the vessels, and now that it is declining, they are predicting that local prices will decrease while still not purchasing. The majority of yards currently exhibit a lack of activity and limited engagement, as there is minimal interest until the currency situation is resolved.
The state bank foreign exchange has increased as a result of the crackdown on the illicit activities of money changers, which has led to an increase in overseas
The interim government has also announced that elections will be held in January, which will have a stabilizing effect due to the elimination of election uncertainty. The banks are now more receptive to opening L.C.s for recyclers,
BEACHING Dates: Throughout the month.
The local market increased slightly, but imports remained unchanged.
The local market has experienced a price increase of 3 USD, while there has been no corresponding change in the import market as of late. The Monetary Policy Committee of the Central Bank of the Republic of Turkey announced a substantial increase in the policy rate, from 25% to 30%. The decision seeks to establish a disinflationary course and regulate inflation, which in July and August has exceeded expectations.
The Turkish central bank raised interest rates again by a sizeable amount, in line with expectations, but disappointing the market, which had anticipated more aggressive measures to combat inflation of nearly 60%. The lira reversed its gains after the Monetary Policy Committee raised rates for a fourth consecutive time, from 25% to 30%.
Beaching Dates Throughout the month