Ship recycling activities resume, says Wirana
The Indian steel market has shown consistent strength over a three-week period now and that is very encouraging for the ship recyclers, according to a report by Wirana Shipping Corporation.
Local steel plate prices were increased by US$6/MT this week (ended 14 Aug) taking the cumulative increase to US$31/MT over last five weeks, said the report. Local scrap prices have increased by US$9/MT the week but the overall price increase in last five weeks is US$1/MT only.
While the demand for semis and finished steel products has not really picked up but a reasonable demand is helping to keep the prices steady or register marginal improvements, it added.
Ship recyclers who have held back on offering improved prices due to the uncertainty are now willing to pay higher prices with the confidence being gained by good local steel market. “While indicative improvement in offer for recycling tonnages is at about US$10/LT LDT, we could see further improvement in offers for right tonnages,” said the report. “We have seen only a couple of vessels being circulated for recycling the week which have seen good offers from ship recyclers.”
Despite the price improvements/possible price improvements, the Indian ship recyclers are still far behind their counterparts in Pakistan and Bangladesh on price front so we will only be seeing specialized vessels and sanctioned vessels being sent for recycling in Alang.
The Reserve Bank of India (RBI) has benefitted from the response of Indian diaspora which has worked as a great tool to support the weakening local currency.
The country’s central bank proactively intervened in the foreign exchange market the week as it has been doing for last few weeks. This strategic move is to counter speculative pressure and dispel market pessimism regarding a substantial depreciation of the local currency. “We would expect prices offered by ship recyclers for recycling candidates to improve,” added the report. Fiinews.com
