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Tuesday, 6 March 2012

Alang under strain

With 55 vessels having arrived in Alang, West Coast India during the month of February alone, the statistics paint the clearest picture yet, of an industry under strain from the volume of available vessels.

With end buyers able to choose from a huge array of units, invariably they will pick the best priced vessels with the most suitable specs, something that is leaving a huge number of unsold vessels in the market without an end buyer in place.

Cash buyer inventories may be growing by the day, but unless there is an end buyer lined up these days, it is becoming an increasingly risky business. Indeed, far from being the boom market of the past few years, it has become a very dangerous arena to operate in, with losses just as easily made as the small competitive margins that are often scrapped over tooth and nail.

Whilst the supply persists, foolhardy buyers still pull the trigger, perhaps hoping to ease previous losses by acquiring anew. Yet the strain on the market is there for all to see. It is groaning and creaking under the weight of the available tonnage, almost doomed to the inevitable collapse that may well be lurking just around the corner.

The current supply, demand balance is quite simply unsustainable and mere will need to be some let up in market candidates to see some sort of return to form across the board. Yet, whilst charter markets continue to lurch from crisis to crisis and as rates plummet to new depths, many owners are faced with NO other option but to scrap and for this reason, the pressure to find solutions in the demo markets continues to pile on.

Source: GMS demo

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