Last week the risk spread west. This week the two chokepoints stopped taking turns. Saudi Arabia and the Houthisexchanged fresh strikes as fighting around Yemen’s Red Sea coast continued, while Iran’s Revolutionary Guards said they struck and detained a Togo-flagged tanker attempting what Tehran called an unauthorised passage through Hormuz. Traffic remains the cleaner commercial measure. Only four commodity vessels were recorded transiting Hormuz on Thursday against a recent ten-day average of about sixteen, while Bab al-Mandab handled twenty-three against an average nearer twenty-six. Passage remains possible. Predictability does not. Crude finally blinked after last week’s surge. Brent slipped toward USD 103 per barrel on Friday and WTI toward USD 101 as additional Saudi cargoes moving through Oman and expectations of partial restoration of the East-West pipeline eased immediate supply fears. Brent was heading for its first weekly loss in three. That is relief, not normalisation. Triple-digit crude, disrupted routing and elevated insurance costs still leave the trading environment sufficiently expensive to support freight rather than release ageing tonnage.
Freight eased from last week’s extremes, but the recycling message barely changed. The Baltic Dry Index closed Thursday at 3,336, down from 3,521 a week earlier, with Capesizes at 5,656, Panamaxes at 2,282 and Supramaxes at 1,762. Capesize earnings remained close to USD 48,000 per day, while the geared sectors continued to show firmness in several Atlantic regions. Owners of ageing ships still have something worth doing with them. The beaches continue to compete against daily earnings and second-hand alternatives, and candidate supply is paying the price.
The macro week added another layer. The Federal Reserve raised its target range by 25 basis points to 3.75% to 4.00%, while India’s August CPI accelerated to 4.82% from 4.45%. The Indian Rupee finished around the 95.9 area against the Dollar, Pakistan’s Rupee strengthened to approximately 277.25, Bangladesh’s latest official spot reference moved back toward 123.0 and the Turkish Lira weakened toward 48.8. There is no clean currency windfall across the basin: Pakistan remains orderly, Bangladesh stable, India has lost its early-September advantage and Turkey continues to surrender Dollar purchasing power.
At the beaches, physical activity continues to tell a more active story than the fresh sales list. Previously secured ships are arriving and delivering across Alang, Chattogram and Gadani, yet no fresh sub-continent market sales were reported this week. Pakistan remains best placed, Bangladesh has demand returning but not yet at numbers capable of consistently beating its neighbour, and India continues to extract its better business from specialist and non-ferrous-rich tonnage. The waterfront is moving. The candidate list is not.
The week’s most relevant recycling-specific regulatory development came from Europe. BIMCO, CLIA, ECSA, ICS, INTERCARGO, INTERFERRY, INTERTANKO and the World Shipping Council jointly called on EU Member States to support the European Commission proposal to add two Indian recycling facilities to the European List. The decision remains pending, but the breadth of industry backing reinforces the structural compliance story that has been building around Alang this year.
Pakistan therefore enters another week at the head of the sub-continent, Bangladesh has hunger without the competitive edge to convert every opportunity, and India continues to operate a second market outside the standard pricing board. Turkey has awakened modestly from the summer lull. Above all of them sits the same constraint: owners are still being paid to trade rather than recycle. The bids are waiting. The hulls are busy elsewhere.
Source: GMS,Inc.
