In a note to clients GMS said the dip has ignited a “full-blown panic” in the scrap market and pointed out that end-buyers with ties to Alang are reluctant to seal acquisitions as levels have plummeted by nearly $20.00 per ldt on average.

“While this is expected to be a temporary shock to the system Indian end buyers were left in a state of confusion, reluctant to commit themselves on new tonnage, leaving many cash buyers nervous on recent high-priced commitments,” it said.

GMS claims tankers and general cargoships sold for demolition in Pakistan are commanding approximately $485 and $455 per ldt on average, respectively, which is well above levels seen in India where the same types of ships are fetching roughly $480 and $450 per ldt.

“Pakistan has been leading the international market in recent weeks and has diverted many eligible India vessels to Gadani shores - this is a trend that looks set to continue given this most recent setback for Indian buyers,”  the company continued.

While many expected activity in Bangladesh to heat up on the heels of a recent holiday GMS claims it’s been a “slow start without any marked improvement” and said it doesn’t expect many ships to end up in this region anytime soon due to the premiums seen in Pakistan.

“Chittagong buyers have seen most of the market tonnage bypass their shores of late [however] and in order to get back in on the action, levels will have to increase significantly just to stand a chance at capturing the tonnage in the East,” the firm told clients Monday.