GMS Week 45 – Bids Hold Fast Against the Tide

Last week’s improving recycling sentiment has encountered a changing international backdrop. Crude oil has retreated sharply, domestic steel prices have weakened across several destinations, and freight continues to fluctuate. Yet recycling indications remain unchanged across all four markets. Buying appetite remains healthy, particularly in Bangladesh, although the persistent shortage of available candidates continues to prevent stronger sentiment from translating into fresh transactions.

Oil supplied the week’s most striking movement. Brent retreated towards USD 99 per barrel on Friday, while WTI traded around USD 91, reversing much of last week’s advance. Expectations of easing Middle Eastern tensions encouraged the correction, although renewed security incidents in the Gulf and Strait of Hormuz demonstrated that shipping risks remain unresolved. Lower crude may ease operating expenses, but uncertainty surrounding regional passage continues to influence tanker employment and owners’ recycling decisions.

Dry freight offered mixed signals. The Baltic Dry Index recovered to 2,740 on Thursday, November 5, from 2,712 a week earlier, having fallen to 2,590 during the intervening sessions. Capesizes strengthened to 4,191 and Panamaxes improved to 1,956, while Supramaxes eased to 1,824. The uneven recovery continues to provide ageing vessels with trading alternatives, restricting the supply of recycling candidates.

Steel markets moved against recyclers. Indian plate declined considerably during the week, while Pakistan recorded a further correction and Chinese steel continued to soften. Bangladesh remained unchanged, although a strengthening Dollar placed additional pressure on the Taka amid substantial foreign currency requirements for energy imports. Weaker steel realisations are restricting purchasing flexibility, even as recycling price indications remain unchanged.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →