South Asia: Imported ship-breaking prices witness mixed trends
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The South Asian ship recycling market witnessed sluggish activity last week. Bangladesh's ship-breaking industry struggled with low demand, hindered by a lack of financing approvals. In terms of prices, India and Pakistan emerged as more active markets, with Pakistan surpassing India's prices. Indian ship prices remained subdued, leading some ship owners to withdraw vessels from the market. The Turkish market remained unchanged, while dry bulk units dominated supply, and container vessels continued trading rather than entering recycling markets.
India
The Indian market remained less active last week, but the market condition seems to have slightly improved last week in terms of prices. It was also reported that two deals were concluded. However, the tonnage levels beached seem to be much lower compared to previous levels. According to sources, demand in the market seems to be weak and prices offered also continue to remain $30-$40/LDT lower than Bangladesh and Pakistan.
Recent deals - Bulker AGIOS NIKOLAOS (9,743 LDT) was sold for $540/LT LDT and HENG HUI 2 (14,775 LDT), a container, traded for a decent $550/LT LDT.
The total tonnage reported at Alang Port last week was 3,374 LDT.
Last week, India's imported scrap market continued its upward trajectory while the domestic market stagnated, leading to reduced buyer interest. The semi-finished and finished markets saw minimal sales activity.
Bangladesh
Efforts by ship owners and cash buyers to engage with Bangladesh for vessel commitments turned frustratingly unsuccessful, resulting in an unproductive week in Chattogram. Local buyers' lowball offers and the adverse economic landscape contributed to this situation. Amid monsoon rains, domestic steel plate prices stalled due to slowed demand for infrastructure steel. Although a few convenient bulk sales occurred, the unpredictable local market behaviour raises the likelihood of competition from other destinations. Notably, bulk carriers were sold at firm prices and 'as is' deliveries, reflecting some activity last week.
Recent deals - According to a recent GMS report, the bulker AN YUE (7,985 LDT) was sold at $475/LT LDT, and another bulker, B H MALLY (9,379 LDT), was concluded at $465/LT LDT. Both transactions occurred at prices below the average rate.
The total tonnage reported at Chattogram Port last week was 33,714 LDT.
On the other hand, the imported ferrous scrap market in Bangladesh had a relatively positive week, marked by moderate trade activity, particularly in the bulk scrap segment. However, the domestic scrap market in Bangladesh is progressing slowly due to weakened demand.
Pakistan
Due to declining prices in Bangladesh and India, Pakistan has unexpectedly risen in the rankings, making Gadani buyers capable of acquiring recently committed 'as is' units. Despite this, Pakistani L/C and financing concerns persist due to economic and political challenges, alongside declining domestic fundamentals. With limited L/C and finance approvals, business dealings with Pakistan remain uncertain until more sales are concluded. Lowball offers from neighbouring countries have redirected attention to the Pakistani market, prompting a closer examination of potential vessel transactions in Gadani.
In the past week, Pakistan did not report any new sales; however, market participants expect a few transactions to get finalised in the coming days. Recently a bulker was heard to be concluded for $525-$529/LDT, as per sources.
The total tonnage reported at Gadani Port last week was nil.
However, Pakistan's imported ferrous scrap market saw moderate trade with rising offers last week. Tariff hikes have unsettled mill production, potentially impacting finished steel trade. Notably, banks are becoming more flexible with issuing letters of credit (LCs).
