Marine Link
Friday, July 19, 2024

GMS: Bangladesh Recyclers Likely to Lose out to India

Maritime Activity Reports, Inc.

May 12, 2024

Source: GMS

Source: GMS

Towards the end of the working week, the Bangladeshi Taka crashed by about 6.4% against the U.S. dollar in a couple of days. This depreciation in the Taka will translate into higher L/C costs that should escalate by about 6% - 7% (at least), reports cash buyer GMS.

This will further reduce already suffocated margins that have resulted from flatlining steel plate prices, ensuring that upcoming vessel acquisitions will be more expensive for local recyclers, who will lose out to a firming India, especially if Bangladeshi plate prices fail to increase soon.

“Notwithstanding the expectantly shaky end to Bangladesh’s working week, a couple of pre-and-post Taka-drop sales did register into this market, and given their fixing levels, the impact from this fall so far seems to be minimal.”

As Indian elections continue into their third week and Modi’s victory seems inevitable, Indian steel prices have been on a mission of late, says GMS, and Alang recyclers also seem to be growing increasingly confident that Modi’s victory will bring with it the highly-awaited portfolio of infrastructure projects that stand to skyrocket India’s economy, which is the fifth largest in the world today.

Pakistani recyclers meanwhile continue to relax, and their increasingly evident absence at the bidding tables has finally resulted in Gadani’s anchorage going ‘dark’ this week. Moreover, as India continues to improve on the back of their fundamentals, how long will it be before Gadani goes ‘dark’ for the rest of the summer?

“Having said that, a tiny faction of Gadani recyclers has come forward with minor price improvements that remain woefully insufficient to snag any (market) units.

“Finally, the hungry collection of Aliaga recyclers out west responsible for driving Turkish recycling prices to the moon last week, continue to negotiate for their share of the firmer tonnage that has come recently available, reportedly without any recourse.”

This week saw several of the larger liner companies gearing up to sell their container ships amidst freight rates in the feeder sector that remain comparatively more depressed than other sectors and noticeably firmer recycling offers on the table.

For week 19 of 2024, GMS demo rankings / pricings are: