The brief spurt in raw material and steel prices witnessed over the last 3 days in India's secondary sector steel market, up on sentiments rather by increased demand, sputtered on weekend removing hopes of recovery in last leg of financial year
Price level of input material as well as finished had made rally over the last 3 days unexpectedly. The rally was primarily seen as firming up of domestic sentiments on the back bottoming out of iron ore and scrap levels in the international market.
Sponge iron price declined at all major locations by INR 100 to INR 200 per tonne due to oversupply and weakening sentiment in finished market.
Scrap price levels remained firm though since IF's indulged in stock replenishment in anticipation of further price increase. However the price levels at Alang for ship breaking and plate cutting scrap dipped.
Pencil ingot price levels corrected at most important locations since there was no significant buying of finished. The rally witnessed in the last couple of days was purely speculative trying to give the market break but not supported by demand.
Rebar market remained quiet with corrections at select locations. Structural steel price though lost at Ahmedabad, Indore and Kolkata.
The world’s last surviving single-hull VLCC is set to make its final voyage to the breakers, market sources said this week.
SBM is said to have sold the 265,000-dwt Alba (built 1989) “as is” in Labuan, Malaysia.
Market experts are placing a price in the region of $10m on the vessel, which has been at anchor at the famous layup spot since June 2011.
SBM purchased the ship as Albatross from Greek owner Dynacom in a $25m deal in April 2011, with the tanker slated for conversion into a floating production, storage and offloading (FPSO) unit.
The scrap sale comes just a week after market speculation suggested the Alba, which was built by Hyundai Heavy Industries, was set for a final lease of life.
Potential storage deal
Rumours were linking the vessel with a trading sale, with a view to securing a storage contract as traders exploiting contango in the oil price fixed a flurry of VLCCs.
Storage has already offered a stay of execution to one VLCC this year, with Global Marketing Systems (GMS) fixing out the double-hull, 297,000-dwt Progress (ex-New Progress, built 1994) on a 12-month storage contract last month.
That pact, described by tanker-market sources as a “great deal” for GMS, was priced at $36,000 per day. The cash buyer had bought the tanker from Greek owner New Shipping last October in a scrap sale.
According to data from EA Gibson, the previous single-hull VLCC to be scrapped was the 282,000-dwt Southernpec 3 (built 1991). TradeWinds reported that vessel fetched $6.8m in March last year.
The last single-hull VLCC sold for conversion, according to Gibsons, was the 284,497-dwt Front Lady, which today works as the offshore unit Petrobras 77.
MUMBAI: The Indian rupee today snapped its two-session uptrend against the American currency, falling 18 paise to close at 62.34 on fresh dollar demand from banks and importers.
The dollar was trading up in global markets on caution ahead of the US Federal Reserve's January policy meeting minutes release.
The rupee resumed lower at 62.20 per dollar as against on Monday's level of 62.16 per dollar at the Interbank Foreign Exchange (Forex) Market. It dropped further to 62.35 before ending at 62.34, a loss of 18 paise or 0.29 per cent.
The rupee had gained 15 paise or 0.24 per cent in the previous two sessions.
The rupee hovered in a range of 62.19 per dollar and 62.35 per dollar during the day.
"We believe with the overnight risk of Fed meet minutes release due tonight, investors will not want to be on the wrong side of the market when it reopens on Friday. So, volumes remained low on Wednesday ahead tonight FOMC minutes and tomorrow's holiday. Indian currency derivative markets are closed tomorrow for a local holiday," said Admisi Forex India Pvt Ltd, Director, Suresh Nair.
The dollar index was up by 0.09 per cent against a basket of its major global rivals.
Asian equities ended higher today as pessimism over the Greek debt situation receded to some extent.
In the New York market, the US dollar were modestly higher against its major rivals in early trade.
Meanwhile, the Indian benchmark Sensex ended higher by 184.38 points, or 0.63 per cent, to close at 29,320.26.
Pre Lunar Holiday iron ore recovery and steady scrap prices raise sentiments among India's secondary sector market players temporarily
Indian secondary steel market has been struggling to revive during the week which has been belied experts. Even the rally has not been steep it certainly has raised eyebrows coming at a time when the fundamentals remain unchanged.
On talking to experts Steel Guru come to know that the recent rally in international iron ore levels and resistance in scrap levels have created temporary optimism. However it is unlikely to sustain given the demand and liquidity crunch plaguing the market.
The price rally was across all products except structural steel declining at Ludhiana and Delhi but rally handsomely by INR 800 per tonne at Mumbai.
Established in 1992 in historic Cumberland, MD. (U.S.A), GMS is the world's LARGEST and FIRST ISO 9001 certified Cash Buyer of ships for recycling. With exclusive representatives in all of the major ship recycling markets in the world, GMS has negotiated about 3,500 ships for recycling since inception. In addition to its original office in the United States of America, the company continues to expand its operations with offices in Hamburg (Germany), Athens (Greece), Dubai (UAE), India (Bhavnagar), Singapore, Seoul (Korea), Shanghai (China) and Tokyo (Japan).
P.O. Box 346041, Suite 101,
Saba 1 Jumeirah Lake Towers, Dubai, UAE