South Asia: Imported ship-breaking prices dip w-o-w amid sluggish market activity

Last week, South Asia's imported ship-breaking market witnessed sluggish activity due to a lack of transactions. Pakistan has been experiencing prolonged inactivity, while Bangladesh is grappling with non-issuance of Letters of Credit (LC). In terms of pricing, India is lagging behind by $40-$50/t, resulting in subdued trading activity. Meanwhile, in the Turkiye market, there is a notable lack of interest in buying, as the recycling yards are showing little enthusiasm to purchase ships due to unfavourable market conditions.

India

In India's Alang market, imported ship-breaking prices remain stagnant compared to other markets in the sub-continent. However, there has been a slight improvement in domestic ship-breaking scrap prices despite the lack of interest in the import market.

Recyclers in the industry are cautious and hesitant, with low inventories at recycling yards and no sense of urgency as regards purchases. The monsoon season is expected to trigger a slowdown in the market, which is expected to persist throughout August.

Total tonnage reported at Alang Port last week was 12,570 LDT.

Bangladesh

In Bangladesh, current market conditions are challenging as obtaining LCs has become increasingly difficult. Cash buyers are facing difficulty in obtaining LCs within the required timeframe, leading to a situation where previously sold ships have to wait at the outer anchorage for a substantial period before they receive the necessary permission to enter the port.

Despite these challenging conditions, three bulker vessels were sold recently, as per a recent GMS report. Two vessels were sold on 'as is' China delivery terms, and one vessel was sold 'as is' Batam delivery. However, these vessels were committed at prices $10-20/t below the average market price.

Total tonnage reported at Chattogram Port last week was 70,471 LDT.

Pakistan

Pakistan's market condition remains largely unchanged. However, there were indications of a gradual revival in the local market. The is eagerly waiting for banks' decision on initiating and facilitating the opening of LCs.

According to a Gadani buyer source, despite the IMF providing funds the market has yet to show any positive momentum. Offers are floating but banks are not opening LCs. Buyers hope the situation might improve in the coming weeks. However, there was concern that interest rates could increase, thereby adversely affecting the ship-breaking industry.

No transactions were reported at Gadani Port last week.