South Asia: Imported ship-breaking prices continue to remain stable

South Asia's ship-breaking market recorded an increase in tonnage flow that has begun to boost recycling markets in 2023 as compared against 2022, and all potential locations are progressively attempting to secure vessels in order to meet an increasing demand, as per GMS report.

Indian market is still the main focus due to far more stable market conditions and the ability to fund new Letters of Credit (L/Cs) irrespective of vessel size. A deal was also concluded in the previous week, as India continues to remain the most preferred destination for ship recycling.

Bangladesh and Pakistan are still dealing with liquidity issues due to a severe insufficiency of US dollars in each country, despite continued optimism that ongoing IMF loan negotiations will bring some relaxation in the nations. The Aliaga market, Turkey, was understandably quiet after massive earthquakes shook the nation and Syria last week.

India concludes deal

Despite having one of the slowest years for ship recycling in decades (2022), drops in domestic steel plate prices in India of about $12/t (in previous week), along with the most recent controversy surrounding the possible collapse of the Adani empire, the demand for fresh vessels in Alang stays high.

India had a deal concluded after lengthy negotiations, the Navy Support vessel (converted from container with 2,200 tonnes (t) permanent ballast on board) BUNGA MAS ENAM (4,750 LDT) was sold at $320/LT LDT basis for a 'as is' under tow Malaysia delivery and for assured HKC recycling in Alang.

On the domestic front, the INR is still trading in the low-to-mid 82.69 range as of the first half on February 14 compared against the previous week, which was around INR 82.66 against the USD.

The total tonnage at Alang Port last week was 54,881 LDT.

Bangladesh remains less active

Despite renewed demand and improving fundamentals, talks on new deals continue at a pace in the Bangladeshi market, but the recyclers who are capable on opening L/Cs for vessels are fewer in number. As a result, the number of deals is surprisingly low, as most of the tonnage has been heading towards Indian shores since the year has commenced, where sellers are assured of timely payment.

Bangladeshi Taka further weakened from BDT 103.97 in the previous week to BDT 106.73 against the USD during the first half of the trading session.

The total tonnage reported last week at Chattogram Port was 73,594 LDT.

Pakistan's persistent L/C issues

As the subcontinent's lowest-ranked and least dependable ship-recycling market, Gadani has had very little to cheer about recently, especially since the current rigidity is expected to last for some time. There appears to be little Gadani buyers can do until the country's liquidity crisis is resolved. Gadani recyclers are certainly doing everything they can to open usance L/Cs or obtain private financial assistance through Middle East and (especially) Dubai-based banks.

The Pakistani currency fell further below PKR 267.50 during the trading session on February 14 from PKR 271.49 in the previous week against the USD.

The total tonnage at Gadani Port last week was nil.

Prices in $/LDT
Source: SteelMint Research