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

South Asia's ship-breaking scrap markets are still stalled at their lowest point. Prices are stable w-o-w, but sentiments on the ground are still somewhat shaky everywhere.

The situation in India has improved slightly, even though prices have decreased by about $200/light displacement tonnage (LDT) after reaching their highest points of over $700/LDT earlier in 2022.

The Pakistani government also entered the fray, limiting a plethora of L/Cs sanctioned on recent domestic acquisitions.

Meanwhile, the central bank of Bangladesh refused to issue additional L/Cs for the purchase of recycling units, and the country has been dormant for yet another week with limited activity.

Prices stable in India

The Indian ship-breaking market followed the global cues. Prices remained stable w-o-w towards the year end. Buyers were hesitant as they were expecting a further drop in prices.

Recently, Alang yards have received a lot of HKC sales attention (especially from blue-chip container owners) who are now reaping the rewards of their investments and commitment to raising safety standards and yard quality. This is a huge benefit to the Alang market, which is experiencing price difficulties, and fundamentals are helpless either.

However, market fundamentals remained unsteady, and the rupee continued to struggle in the currency exchange market. The INR traded at 82 against the US dollar ($).

The total tonnage at Alang Port last week was 28,368 LDT.

Bangladesh in dormant state

The latter few months of 2022 allegedly saw no market sales into Bangladesh of any consequence. Without a quick and consistent infusion of cash to free up money for purchasing additional units, the majority of purchasers were unable to secure funding from the central bank to create new L/Cs.

Market sentiments are uncertain. It is still unclear up to what extent the much-anticipated IMF loan would support the market again.

The Bangladeshi Taka momentarily surpassed 105 versus $ before settling at BDT 102.30 at the conclusion of the week.

The total tonnage reported last week at Chattogram Port was 77,970 LDT.

Pakistan market dull with LC restriction

Gadani continues to be the most expensive market. End buyers have finally been able to commit to filling empty plots with a variety of mostly dry bulk sales. News finally broke that Pakistan's central bank is not opening any new L/Cs for local recyclers. This is catastrophic for the industry, especially as vessels are now beginning to arrive at the local waterfront.

Additionally, the national currency continued to depreciate for yet another week, almost passing PKR 225.50 in comparison to $.

A number of capes and Panamax bulkers have been sold to local buyers who finally looked eager to take advantage of the situation.

The total tonnage at Gadani Port last week was 28,921 LDT.

Prices in $/LDT
Source: SteelMint Research