South Asia: India edges ahead in ship recycling market buoyed by rising steel plate prices

The South Asian ship recycling market saw contrasting fortunes this week. India thrived with surging demand and competitive prices, potentially becoming the new leader. Bangladesh grappled with financial woes, lowering offers and facing a bleak June. Pakistan's market took a backseat due to a weak Rupee and stagnant steel prices.

India

India's ship recycling industry was observed defying pre-election anxieties with a surprising surge this week. Buoyed by rising steel plate prices, likely due to positive election forecasts, Alang recyclers are offering some of the most competitive prices in the market, particularly for larger, in-demand vessels. This strong demand is expected to overcome the traditionally slow monsoon season, potentially making India the epicentre of ship recycling activity in the near future. With prices rivalling Bangladesh and Pakistan and attracting even larger ships previously headed there, India's lead in the industry seems to be solidifying. While a slight dip in the Rupee might cause a ripple, the overall outlook for India's ship recycling market remains bright, with the potential to dominate the industry by year-end.

The total tonnage received at Alang Port was around 35,682 LDT this week.

BANGLADESH

Bangladesh's ship recycling industry weathered a difficult storm in the last week of May. Anticipated currency depreciation by the central bank, coupled with rising interest rates, created a financial strain on Bangladeshi recyclers. This squeeze forced them to slash their offers for ships, potentially bringing them down to, or even below, Indian prices. The lower offers led to a market stall, and with local steel plate prices remaining stagnant, the outlook for June turned bleak. While the upcoming budget might provide some relief, Bangladesh faced a real threat of losing its market leader position to a resurgent India. Despite the gloomy market, Bangladeshi ports continued to receive a steady stream of old ships from the Far East, reflecting the industry's current state of uncertainty.

The total tonnage received at Chattogram Port was around 39,596 LTD this week.

PAKISTAN

Pakistan's ship recycling market took a backseat in the final week of May. The Pakistani Rupee remained weak against the US Dollar, and local steel plate prices stagnated at a weakened level. This financial situation kept Pakistani buyers on the sidelines, causing them to slip to third place in the market rankings.

With India surging ahead and Bangladesh facing challenges, Pakistan might only see action for occasional, unwanted ships from the region, or for local one-off sales. The arrival of a single bulker this week highlights this trend - Pakistani recyclers are currently focused on processing their recent purchases, leaving them out of the competition for new ships.

The total tonnage received at Gadani Port was around 12,778 LDT this week.