South Asia: Imported ship-breaking market remains sluggish w-o-w
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The South Asian ship-breaking market last week continued to remain lethargic as owners and cash buyers sold tonnage at declining prices, particularly in challenging markets like Pakistan and Bangladesh. Prices have fallen as compared against the corresponding period last year, due to strained letters of credit (LCs) and lack of financing. India remains relatively stable in terms of buyers, but prices are low, leading to caution. The supply of tonnage from Far East and China persists, and hopes for increased demand is expected after monsoon season ends and yards/mills resume operations.
India
During the previous week, the ship-breaking market in India displayed limited activity due to the Independence Day holiday, resulting in minimal transactions. Concurrently, the Indian market has witnessed a decrease in prices, causing it to rank at the lowest level compared to other markets within the subcontinent. Consequently, recyclers are adopting a cautious wait-and-watch strategy before making a firm offer.
However, a recent deal was concluded for India as per a recent GMS report, SINOKOR AKITA, a container vessel with a tonnage of 4,672 LDT was successfully sold at a price of USD 564/LDT.
The total tonnage reported at Alang Port last week was 10,811 LDT.
However, in the imported ferrous scrap segment, there has been a relatively high demand in India. Nevertheless, the transactions are getting concluded mostly at negotiable prices. Despite this, sellers maintained firm pricing, discouraging buyers from waiting for further price drops. Offers for European shredded scrap in India stood at $430-435/t and HMS (80:20) to Nhava Sheva were at $405-410/t on CFR as of last week.
Bangladesh
In the previous week, the shipbreaking market in Bangladesh achieved some successful transactions, despite facing challenges with opening fresh LCs. Although the process of opening LCs was sluggish, some individuals were able to successfully complete transactions. However, the concluded deals were executed at prices below the market's average. Moreover, the ongoing monsoon season continued to impact yard operations. Notably, Bangladesh received most of its tonnage from the Far East region mainly due to the less delivery costs.
Recent deals
The Chinese bulker MINGZHOU 25 with a tonnage of 6,729 LDT was sold for USD 400/LDT and JIN-YUAN SHENG 9, a multi-purpose vessel with a tonnage of 3,000 LDT was concluded at a rate of USD 490/LDT.
The total tonnage reported at Chattogram Port last week was 35,061 LDT.
On the other hand, the imported scrap market is also strained due to LC restrictions by the Central Bank. European suppliers are resolute amid sluggish scrap flow. Buyers favour Australia and Hong Kong for superior quality. As of the previous week, offers from Europe (containers) and the US (bulk) are heard at $445/t and $410/t for shredded and HMS grade respectively. However, buyer interest remains limited.
Pakistan
In Pakistan's ship-breaking market, while prices remain competitive compared to other markets and demand seemed strong, the primary challenge currently is the availability of functional LCs from the end-buyers who have returned to the bidding process after a nearly year-long gap. According to trade sources, some deals have been heard concluded for Pakistan at USD 500/LDT levels.
The industry is now in a phase of anticipation, waiting to see if these LCs can be successfully opened and transactions executed. This is seen as a crucial step to reintroduce a competitive market into the mix after a prolonged period of absence and instability. The market had been negatively impacted by ongoing economic and political uncertainties, which have hindered any positive market developments over the past year.
The total tonnage reported at Gadani Port last week was nil.
Last week, Pakistani ferrous scrap buyers paused due to Independence Day and awaited price shifts. Sellers held firm due to demand. Europe-origin shredded scrap is offered at $435-440/t based on quality, and deals concluded at the $437-440/t range as per market sources. Middle East supplies were preferred for faster delivery.
