The prime factor behind the enthusiasm is the strengthening of the Indian rupee, which has been trading in a narrow band of INR58-59 against the US dollar. This has given much-needed confidence to many end-buyers to return to the bidding tables.
The upbeat market saw tankers that may have been considered certainties for the Pakistan market due to cheaper gas-free status, now being made gas-free for hot works at added cost, and brought into India to cash in on the premiums on offer.
The bullish sentiment in India caused offers for clean tankers to soar beyond the $500 per ldt mark, even as bids for general cargo vessels touched $475 per ldt. The strong offers from Alang drew the fangs of operators from both Bangladesh and Pakistan, whose bids were at least $25 per ldt off the pace in both categories.
Markets in Chittagong and Gadani, in fact, remained in a status quo situation, with annual budgets due this week, subdued levels and buyers who were unwilling to compete against the strong offers from their Indian counterparts.
The situation was still worse in the Turkish and Chinese markets, which remained at least $150 per ldt short of sub-continental prices. With such disparity in offers, most markets have been struggling to divert tonnage to their respective shores, resulting in a no-market-sale week in all major markets.
"With the supply of vessels still (relatively) steady, the onset of Posidonia celebrations this week is likely keep most owners and brokers pre-occupied and probably defer ongoing negotiations until the end of the week or early next week," said Dubai-headquartered cash buyers GMS.
The dominating offers from Indian cash buyers saw the 16,248 ldt, Ukrainian-built tanker Valdivia being brought across from Chile after fetching an impressive $402 per ldt, despite significant delivery expenses, particularly on bunkers, all the way from South America.
Likewise, the Shipping Corporation of India owned 8,861 ldt chemical tanker Palanimalai was sold for a decent $435 per ldt on 'as is Visakhapatnam' basis with extra payment for bunkers. This deal could be considered very India-specific due to the disparity in prices with competing markets at the moment.
The Turkish owned 7,142 ldt general cargo vessel Liber fetched an impressive $496 per ldt from Alang buyers. The right size, viz. meaning a large number of local buyers interested in making offers, and a decent trading history played their parts in achieving the excellent price.
Additionally, the Chinese owned 7,370 ldt general cargo vessel Yuan Heng with decent cargos was committed at $485 per ldt nett to owners, with inward clearance on buyer's account. This could be considered a breakeven price approaching $490 per ldt.
Other than in Bangladesh, where the 12,216 ldt, Chinese controlled panamax bulker Da Fu Star was committed for a strong $470 per ldt, no other sales were recorded in Pakistan, China and Turkey.
As prices in India continue to surge ahead of competing neighbours, and monsoon clouds loom over the horizon, it remains to be seen just how much longer local sentiment remains this eager and local buyers remain motivated to keep prices elevated well above the competition.
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