Highlights:

Monsoon
underway.




Negative budgets.




Lack of offers.




Chasing down
market.




Further falls?


















With the monsoon season underway and torrential rains across the sub-continent now
commonplace to break up the sweltering heat, the positivity that had recently entered the
market (post elections in India) is gradually being washed away.

Going into the first weeks of June, a mixture of negative budgets in both Pakistan and
Bangladesh, declining scrap steel prices, and a depreciating Indian Rupee left all sub-
continent markets in a state of turmoil.

Indeed, many end buyers simply chose not to offer, for fears of further falls on the horizon.
A standoff therefore emerged between those cash buyers, who have purchased vessels at
the peak of the market and are yet to commit their units onwards, and reluctant end users,
as high resale prices are swiftly becoming a thing of the past.

As vessels are being resold at ever lower numbers, end byers are finding justification in
rolling their prices back further and some of the vessels committed at the peak of the market
to unscrupulous cash buyers may be set for (and some are reportedly facing) trouble at the
waterfront.

Owners hoping to enjoy the previously bullish summer pricing have been shocked into the
new realities on offer and would be better off taking in the World Cup action in Brazil rather
than chasing the highs of yesterdays numbers.

Many in the industry are thus fearful that prices may dip further as the summer months
progress, but a rally (as is often the case) may be just around the corner, come the fourth
quarter of the year, as all markets ramp into overdrive once again and previously reticent
owners finally take the plunge by selling for scrap.

For week 24 of 2014, GMS demo rankings for the week are as below:

Demo
Ranking
Country
Market
Sentiment
GEN CARGO
Prices
TANKER
Prices
1 India Weak USD 455/lt ldt USD 485/lt ldt
2 Bangladesh Weak USD 450/lt ldt USD 480/lt ldt
3 Pakistan Cautious USD 450/lt ldt USD 480/lt ldt
4 Turkey Weak USD 325/lt ldt USD 325/lt ldt
5 China Weak USD 310/lt ldt USD 325/lt ldt


Cash Buyer to be
ISO 9001:2008
Certified



WASHED AWAY!

June 13, 2014
Volume 142, Issue 624
Week 24






















Time is the coin of life. Only you can determine how it will be spent.


- Carl Sandburg





MARKET COMMENTARY



















































GMS Weekly



BANGLADESH

BANGLADESH

BANGLADESH

BANGLADESH

BANGLADESH

BANGLADESH

BANGLADESH

BANGLADESH
APPETITE MUTED!



As taxes and duties on new units increased by as much as USD 5/LT LDT on scrap
steel and a massive USD 30/LT LDT on bunkers, many end buyers chose to sit back
and observe the realities of what the budget will yield (and its final ratification)
rather than commit on new units.

Furthermore, many end buyers have already been booked with tonnages that were
committed at the peak of the market, so local appetite, for the most part, remains
subdued.

With constant rains now afflicting the industry, it will be a stop - start couple of
months in Chittagong as end buyers occasionally emerge with specific demands for
news units, and that too, at far lower levels overall.

One sale reported last week, the chemical tanker GLOBAL EMINENCE (2,576 LDT)
has not been sold into Bangladesh but rather directly to China, reportedly at levels
region USD 330/LT LDT.

Additionally, the general cargo vessel NEW FORTUNE (2,374 LDT) was committed
to Bangladeshi buyers for a relatively weak USD 430/LT LDT as a new statement on
pricing began to show through.


Duties increase.

Page 2 of 8
MARKET SALES REPORTED

VESSEL NAME TYPE LDT REPORTED PRICE
NEW FORTUNE General Cargo 2,374 USD 430/LT LDT

Sentiments low.

















RALLY REVERSES!



It is clear now that the bubble has well and truly burst in the Indian market that has
enjoyed a spectacular rally during the first 6 months of the year. With almost constant
gains during the first two quarters, many cash buyers seem to have been caught
unaware with this most recent setback and some painful times seem destined for those
that have overextended themselves.

The Indian Rupee has been threatening the Rs. 60s mark again over the course of the
week (trading mostly into the high Rs. 59s against the U.S. Dollar), whilst falls in local
steel plate prices have seen almost USD 25/LT LDT wiped away in the space of two
weeks alone.

The offering has therefore stalled locally and most end buyers are refusing to offer on
new units until some stability has reestablished itself locally.

Not all is lost though as Rs. 59 is a far healthier level than the disastrous Rs. 70 that the
Indian Rupee touched last year, prompting full on panic in the sub-continent scrap
markets. Capacity also remains healthy and supply is expected to slow over the
summer months (particularly as scrap prices cool off), despite less than impressive
freight rates across a number of sectors.

As such, cash buyers leaving very short reply times on their offers with the negative
spiral the market has entered and the last thing any buyer and seller wants is to be in a
position where they are chasing down the market, with lower numbers being offered
by the day.

Notwithstanding, a number of sales are reported to have taken place locally, with the
most eye catching perhaps being the reefer BALTIC NOVATOR (6,752 LDT), which
saw an extraordinary USD 496/LT LDT less comms, with 72 T of aluminum responsible
for the huge price on show. The MSC Hina (10,655 LDT), having failed previously was
reportedly resold for a full USD 10/LT LDT less this week.













INDIA

INDIA

INDIA

INDIA

INDIA

INDIA

INDIA

INDIA
Bubble bursts.
MARKET SALES REPORTED

VESSEL NAME TYPE LDT REPORTED PRICE
BALTIC NOVATOR Reefer 6,752
USD 496/LT LDT (including 72 T
aluminum)
BENEGAS LPG 3,443 USD 495/LT LDT
FLORIDA II Bulker 6,485 USD 457/LT LDT
MSC HINA Container 10,655 USD 490/LT LDT

Seeking stability.
Chasing down market.
GMS Weekly Page 3 of 8
















































GMS Weekly

BRIGHT SPOT!



Pakistan emerged as perhaps the one bright spot in the sub-continent markets with
enquiries emerging for all types of vessels at steadied numbers. The surprising aspect is
that Gadani buyers have tended to mirror the sentiments of neighboring India and have
positioned their prices just behind.

To this end, a number of local sales reportedly took place, from cash buyer inventories
(both as is and delivered) that may have been previously earmarked for either
Bangladesh or India.

With a number of larger tankers in play (gas free for man entry only), Gadani buyers
may be set to acquire some juicy units over the monsoon months whilst both India and
Bangladesh lay low.
PAKISTAN

INDIA

INDIA

INDIA

INDIA

INDIA

INDIA

INDIA
Page 4 of 8
NO MARKET SALES REPORTED


Busy months ahead?

Enquiries emerge.
















































GMS Weekly

CHINA

BACK IN THE FRAME?!



As the sub-continent markets cooled, Chinese buyers began to acquire one or two more
units despite the continually weak market and prevailing levels for all types of vessels
still in the low USD 300s/LT LDT.

The gap between a sub-continent and a China delivery still stands at USD 150/LT LDT,
but local demo yards have remained active thanks to the government subsidies that have
seen a whole host of vessels of all sizes and types (from state run owners) fill local yards.

Other South East Asian scrap yards in Vietnam, Indonesia, and even the Philippines
have also been active in diverting international (non-Chinese flagged) tonnage away
from Chinese yards at similar levels - if owners choose to ignore the higher numbers in
the sub-continent, even for smaller general cargo units.

NO MARKET SALES REPORTED


Page 5 of 8

Activity increases.





GMS Weekly

Page 6 of 8

SILENCE IN ALIAGA



The depreciation of local steel plate prices and the fluctuation of the Turkish Lira have
translated into a drop of USD 10-15/LT in levels offered last week in Aliaga. A fact, which
has consequently resulted in depriving end buyers from acquiring any of the market
tonnage this week.

The appetite of end buyers remains strong since most of the ship recycling facilities
operate at less than 40% of their capacity. In combination with the low supply of units,
(which has persisted for the last few months), the demand for tonnage is expected to
remain high in the short-term.

While it remains to be seen how the other fundamentals (that are affecting pricing) are
going to behave - overall, we anticipate a quite summer for the Turkish buyers.
































NO MARKET SALES REPORTED


TURKEY

Quiet summer.




FASCINATING SPACE FACTS
























INDIA
BANK HOLIDAYS BEACHING TIDES

No holidays in June

June 10 June 19
June 23 July 02














BANGLADESH
BANK HOLIDAYS BEACHING TIDES

June 14 Lailatul Barat

June 13 June 16
June 27 June 30




























































Saturn's moon Titan has plenty of evidence of organic (life) chemicals in its atmosphere.
Life is known to exist only on Earth, but in 1986 NASA found, what they thought might be fossils of
microscopic living things in a rock from Mars.
Most scientists say life's basic chemicals formed on the Earth. The astronomer Fred Hoyle said they
came from space.
Oxygen is circulated around the helmet in space suits in order to prevent the visor from misting.
The middle layers of space suits are blown up like a balloon to press against the astronaut's body.
Without this pressure, the astronaut's body would boil!
The gloves included in the space suit have silicon rubber fingertips, which allow the astronaut some
sense of touch.
The full cost of a spacesuit is about $11 million although 70% of this is for the backpack and the
control module.
Ever wondered how the pull of gravity is calculated between heavenly bodies? It's simple. Just
multiply their masses together, and then divide the total by the square of the distance between them.
Prices indicated above are as reported in the market and are not necessarily accurate. This information is provided without prejudice and is given in
good faith and without any guarantees whatsoever. While every care has been taken in the preparation of this report, no liability can be accepted for
any loss incurred in any way whatsoever by any person relying on the information contained herein. Opinions expressed herein may be deemed
subjective and arbitrary. This WEEKLY is intended only for the person or entity to which it is addressed and may contain confidential and/or
privileged material. Any review, retransmission, dissemination or other use of this information by persons or entities other than the intended
recipient is prohibited.


IMPORTANT DATES

Page 7 of 8
Miscellaneous
i

























ALANG - Port Position as June 13, 2014
No. VESSEL NAME LDT TYPE STATUS
1 Abris 5,468 Bulk Carrier Arrived June 12
2 Bateel 16,283 Oil Tanker Arrived June 03
3 Daphne 13,664 Passenger Vessel Arrived June 06
4 Elcastaro 990 General Cargo Arrived June 05
5 Erk 6,720 Bulk Carrier Beached June 11
6 Fuji 11,539 Container Beached June 12
7 Golden Arrow 4,355 RoRo Beached June 12
8 Ingas 2,493 LPG Beached June 10
9 Ji Yang 4,085 Reefer Arrived July 23
10 Jina 6,485 Bulk Carrier Beached June 12
11 Nawal Ali 1,553 General Cargo Beached June 10
12 Repulse Bay 2,122 General Cargo Arrived May 30
13 Rose 6,100 Oil Tanker Arrived June 11
14 San Teodoro 7,134 Bulk Carrier Arrived June 12
15 Sea Breeze 4,219 Container Arrived June 07
16 Seair Queen 8,120 Oil Tanker Arrived May 24
17 Sunny Oasis 24,104 Container Arrived June 09
18 Tuba 10,146 Oil Tanker Beached June 12
19 Venus 3,277 General Cargo Beached June 11
20 Xiamen 2,150 Container Arrived June 12
Total Tonnage 141,007
CHITTAGONG - Port Position as of June 13, 2014
No. VESSEL NAME LDT TYPE STATUS
1 Golam-E-Mostafa 4,950 General Cargo Arrived May 25
2 Hai An 3,205 Tanker Beached June 12
3 Khudoznik Rerikh 5,441 Container Arrived May 23
4 Win Shing 1 2,384 General Cargo Arrived May 30
Total Tonnage 15,980
GADANI - Port Position as of June 13, 2014
No. VESSEL NAME LDT TYPE STATUS
1 Subam 15,886 Tanker Beached June 12
Total Tonnage 15,886
WHILE EXTREME CARE HAS BEEN TAKEN IN THE PREPARATION OF THIS REPORT, NO LIABILITY CAN BE ACCEPTED FOR ANY LOSS INCURRED IN ANY WAY
WHATSOEVER BY ANY PERSON RELYING ON THE INFORMATION CONTAINED HEREIN.












GMS Port Report
Page 8 of 8