London: Scrap prices have turned a corner and are up by around $20/LDT as local steel plate prices improve and the Indian rupee stabilises.
“Capacity remains very good locally and it is encouraging to finally see end buyer enquiries emerge for all types of vessels in the sub-continent again,” GMS, the world’s biggest cash buyer of steel, said today in its weekly market report.
“Consequently, several market sales took place this week at improving rates and a number of other units were under negotiation at speculative levels as cash buyer competition ramped into overdrive once again.”
Bangladesh has been the favoured destination for demolition of capesize bulk carriers of late. No capes were sold this week, in contrast to previous weeks, but several more capesize candidates should hit the market within the next two weeks as scrap prices improve, GMS said.
Bangladesh is offering increasingly competitive pricing and now offers the highest rates per long ton (lt). Its prices for bulkers today are $380/lt ldt, up $30/lt ldt on February 27. Tanker prices have likewise improved from $370/lt ldt a month ago to $400/lt ldt today.
Indian yard capacity currently stands at around 60% after a long period of low activity, with no new batches arriving since before Chinese New Year, but buyers in the country are beginning to fight back as the rupee stabilises against the dollar.
Local steel prices are climbing slowly but surely, and have reached $370/lt ldt and $390/lt ldt for bulkers and tankers respectively, compared to $365/lt ldt and $385/lt ldt a month ago.
“Indian buyers (off the back of improving fundamentals and expectation that an anti-dumping ban on Chinese steel could soon be enforced) realised that some greater aggression on pricing would be needed to secure their share of the tonnage on offer,” GMS said of the last week’s activity.