Shipbreaking cartel in Bangladesh collapses
The shipbreaking cartel in Bangladesh has collapsed after exactly two months of service as it failed to obtain adequate tonnage, GMS, the world's largest cash purchaser of recycling ships, said.
A few strong local tonnage purchasers for demolition tried to regulate prices in their favor during the sixty-day period ended 21 November, at a time when both India and Pakistan were kicking on, leaving Bangladesh trailing in their wake and doing very few deals.
“Many end buyers had been pressuring for this to happen for some time … and now there is a free market for cash buyers to offer any available tonnage once again,” GMS stated.
As explained, rather than depending on the below-market prices determined by the cartel, end purchasers are now free to bid their own prices.
Demand in Bangladesh has been increasing steadily and so it is no surprise that they agreed to end it all at the latest association meeting and go back to the usual free market ways as those end buyers had already begun to bid tonnage privately from cash buyers who were potential candidates for Chittagong.
In the coming time, GMS believes, with the fall of the Bangladeshi cartel and the improvement of Pakistan, Indian buyers will have to make efforts to secure their share of tonnage. There will also be a need for the Pakistani market to retain its position as the number one market.
Maritime Business World