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Ship recycling market report by BEST OASIS Limited 5th August

Ship recycling market report by BEST OASIS Limited 5th August

Another week has passed with little progress made and a general lack of enthusiasm for recycling among ship recyclers. The scarcity of accessible recyclers, coupled with their reluctance to provide practical offers for the limited number of vessels presently obtainable in the market, is a noteworthy observation. The prevailing slowing down in the sub-continent can be primarily attributed to the adverse impact of severe monsoon rains. The market has experienced a lackluster performance due to the limited scope of cutting and recycling activities. Global steel production experienced a marginal decline from May to June, with a decrease of -1.8% for the month, resulting in a total of 158.8 million metric tons produced worldwide. However, it is worth noting that this figure indicates no significant change (-0.1%) compared to steel production in June 2022. The global raw-steel output for the first half of 2023 amounted to 943.8 million metric tons, indicating a decrease of -1.1% compared to the corresponding period in 2022. According to World Steel’s recent outlook report, the current rate of production is falling behind the projected pace for the anticipated 2023 demand. Fitch Ratings has recently downgraded the credit rating of the United States, reducing it from triple A to double A plus. This decision was made in light of the deteriorating fiscal conditions and governance within the nation. It is worth noting that this downgrade comes merely two months after a period of political brinkmanship, which had pushed the world’s largest economy perilously close to a sovereign default. According to the rating agency, the rationale behind its downgrade pertains to the anticipated decline in fiscal conditions over the course of the next three years, as well as the presence of a substantial and escalating burden of general government debt. Fitch has also observed a gradual deterioration in governance over the course of the last twenty years, which has been evidenced by recurring episodes of debt limit impasses and eleventh-hour resolutions.

Alang : The hub of ship recycling in India

INDIA: There is slight uptick in the market, but it may be short lived

The market has exhibited stability with a slightly positive trend in local steel prices observed over the course of the week, although it is important to note that this may be a temporary phenomenon. Due to the substantial rainfall levels across all sectors in India, there is expected to be a decline in the demand for steel in the upcoming months until factories resume operations. Given the significant rainfall experienced, it is likely that a considerable portion of the crops has been adversely affected. Consequently, the primary concern for the affected population would be to ensure the sustainability of their livelihoods. In this context, it is important to note that the consumption of steel may potentially have a negative impact in the foreseeable future. There has been an elevated degree of political unrest observed in certain regions of the country.

Beaching Dates

14 August to 20 August 2023

28 August to 31 August 2023

01 September to 06 September 2023

BANGLADESH: The market is characterized by a lack of stability, with the issue of limited LC availability persisting.

The local markets are currently experiencing a decline, with limited purchasing activity. There is a sizable difference between the local steel pricing and the price of ship steel. However, due to the volatility of the currency, purchasers are unwilling to assume additional risk. The longstanding issue of LC remains unresolved and continues to pose significant challenges. There is no sight LC available at this location. Despite adopting initiatives to reduce imports in fiscal 2022-23, Bangladesh witnessed an overall foreign transaction deficit of $8.22 billion, up from $6.65 billion in FY22, as reported in the most recent Bangladesh Bank report. This information was given in the balance of payment of foreign currency transactions.

Beaching Dates

16 August to 19 August 2023

30 August to 31 August 2023

01 September to 02 September 2023.

TURKIYE: The current state of the local market is characterized by a decline and limited tonnage availability.

The local market has experienced a significant decline of 10 USD, while imports have remained relatively stable with minimal activity. The current availability of tonnage remains limited. Turkish inflation rate saw a significant increase of 9.49 percent on a month-on-month basis in July, according to official statistics. This rise is above the forecasted expectations and is primarily driven by the implementation of many tax measures as well as the strong depreciation of the Turkish lira. The aggregate Turkish steel product exports had a decline of 39.2 percent during the first half of the current year in comparison to the same period in 2022, resulting in a total value of $7.2 billion.

Disclaimer: While every care has been taken to ensure that the information in this publication is accurate, Best Oasis Limited can accept no responsibility for any error or omissions or any consequences arising therefrom. Figures are based on latest available information on various platforms, which is subject to subsequent revisions and corrections. Reproducing any material from this report without permission from Best Oasis Limited is strictly prohibited. The author of this Weekly Ship Recycling Report is Varsha Mishra. Any comments or viewpoints expressed are those of the author alone, not necessarily the Best Oasis Company.


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