GMS: Vessel Prices Expected to Decline in July
Vessel prices are already down by about USD 20 – USD 25 / LDT, reports cash buyer GMS, as further decline is expected in the first half of July as previously forecast.
Shipowners and cash buyers are now chasing down a declining market, and recyclers are facing exacerbating economic challenges. Not only are local steel plate prices in shambles, but currencies are also taking tumbles at key destinations and have unexpectedly delivered a monsoon retreat for industry players who are looking to conclude business at the various ship recycling destinations,” says GMS.
In the interim, vessel availability is expected to coincidentally take a hit as Israeli strikes against Hezbollah Rebels in the north and U.S. Forces engaging Houthi Rebels in the south / Red Sea lanes should create further delays for commercial traffic. Should these strikes continue unabated, freight rates are not only expected to hold / get firmer, but the strikes could squeeze supply even more and potentially push global inflation higher.
Meanwhile, as prices cool off post-election and until the announcement of India’s budget in late July, the Indian economy is expected to remain suspended in confusion. Offers from India have been overly cautious of late, as Alang buyers eagerly anticipate the Indian budget to formulate some sort of direction that the market could move for the remainder of the year and even in the years ahead.
Bangladesh also remains reticent as nothing other a couple of small LDT units have arrived locally and vessel prices have dropped due to a hike in fuel duties – all of which are working against the local industry.
“The one bright spot for the week saw something of a renaissance for the beleaguered Pakistani market as news of a couple of private sales emerged this week. Although Gadani is not quite be on the same competitive level as Alang or even Chattogram, but for certain geographically positioned vessels looking for lower delivery costs and with certain crew nationalities on board seems to make more sense for such units to head to Gadani shores and contend with no beaching tides.”
For week 26 of 2024, GMS demo rankings / pricings are: