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Ship recycling market is experiencing the same volatility and uncertainty that the global economy is going through as the supply chain disruption rips through the global economy and the commodities market are eager to rally on every news. Steel prices have seen a slight correction in the subcontinent nations with buyers remaining cautious due to dramatic price fluctuations and waiting for prices to stabilise. On the supply front, there is extreme shortage of tonnage in the recycling market as the surging ocean freight rates have made the owners hold onto their assets tightly. Overall, the demand from end buyers remains strong in all recycling destinations, and aggressive bidding for scarcely available tonnage has ensured attractive offer prices in all markets.
ECSA, the European Community Shipowners' Associations, has strongly endorsed an amendment to the EU's Waste Shipment Regulation that would effectively make it possible to recycle EU-flagged vessels at ship recycling yards located outside of the OECD countries. They believe the EU should not embrace or cave into protectionist measures that will cut off facilities making substantial progress from the global ship recycling market.
Oil prices marched back towards USD 110 per barrel as prices have been highly sensitive to developments in Ukraine and the faltering peace talks between Russia and Ukraine have raised the spectre of tighter sanctions and prolonged disruption to oil supply.
The US Federal Reserve raised interest rates by 25 basis points and signalled hikes during all six remaining meetings of this year, launching a campaign to tackle the fastest inflation in four decades even as risks to economic growth mount.
Domestic steel prices witnessed a slight correction in the earlier part of the week but are again on a rise with improving sentiments. There’s mixed feeling among the end buyers as few are aggressively bidding to acquire tonnage while others prefer to wait and watch the global scrap prices outlook before making any final buying decision.
Despite the soaring steel prices, the producers are being left high and dry as input costs especially of Coking coal, Thermal coal, scrap and nickel are spiraling out of control due to the ongoing geopolitical tensions choking the supply chain.
The European Union will increase tariffs on stainless steel products from India and Indonesia after determining they benefited from unfair subsidies.
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The end buyers from Bangladesh are actively bidding for any size of tonnage available in the recycling market to maintain their inventory and meet the domestic demand of ship plates. They are leading the price board by offering higher prices than the neighboring markets of Pakistan and India.
Steel mills have slowed down production due to the ongoing scarcity of scrap and the expected decrease in demand owing to the upcoming holy month of Ramadan.
The rebar market remains subdued as end-user demand remains weak. Major steel mills have not changed their offers on rebar. The mills are likely to await clarity on offers before making the next round of purchases.
There is a great deal of uncertainty and confusion in the market owning to multiple factors, such as the devaluation of the Pakistani Rupee, the correction in steel prices, and ongoing political issues surrounding the noconfidence motion against the Prime Minister. Such scenarios are keeping the market participants cautious of making major buying decision and they are waiting for a clear price direction.
The steel market is gradually improving as the acceptability from end-users has improved against the previous week when the rebar offers were raised by major steel mills due to severe supply chain disruption increasing freight charges, scrap prices as well as the cost of inputs.
The PKR fell to a fresh all-time low at Rs.180.07 per USD due to unsustainable current account deficit. The rupee has maintained a downward trend for the past 10 months by losing 18.25 % compared to the record high of Rs. 152.27 in May 2021.
Three small-sized tonnages have arrived in Aliaga this week.
The European Commission has proportionately redistributed its import steel quota volumes for Belarus and Russia among other exporting nations after banning imports from these countries. Vice President of Turkish Steel Exporters’ Association stated the 15% quota increase in Turkey steel exports to EU will have a positive impact of USD 1 Billion on the country’s export.
Turkey’s Central Bank kept its benchmark interest rate unchanged for a third month keeping the view that inflation is being fueled by the war and would ease once the conflict ends. The Turkish Lira is currently trading at TL 14.78/USD.
LEADING CASH BUYER OF SHIPS AND
ENERGY ASSETS WORLDWIDE