South Asia: India's ship recycling market muted amid competitive offers from Pakistan, Bangladesh
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The South Asian ship recycling market faced ongoing challenges amidst uncertainties across its key players. In India, with the general elections looming, industry stakeholders tread cautiously, holding back on offers in anticipation of potential policy shifts. Alang recyclers experienced a slowdown due to political and economic uncertainties, while fierce competition from neighbouring markets like Pakistan and Bangladesh adding pressure. Meanwhile, in Pakistan, domestic recyclers struggled to maintain competitiveness against Chattogram choppers. As Gadani recyclers aim to secure candidates amidst bullish freight markets, Bangladesh grappled with a shortage of available tonnage despite promising offers. With facility upgrades and regulatory changes on the horizon, the region braces for transformation.
INDIA
Amidst uncertainty regarding the upcoming general elections, the Indian ship recycling sector continues to face ongoing hurdles. Many industry participants are holding off on making offers, anticipating potential policy changes following the elections. However, Alang recyclers are currently experiencing a slowdown due to political and economic uncertainties, aggravated by a shortage of viable recycling opportunities. With fierce competition from markets like Pakistan and Bangladesh coupled with the imminent arrival of the Holi holidays, Alang buyers may seek temporary respite in the quietude until more favourable conditions prevail.
The total tonnage received in Alang was around 21,019 LDT this week.
PAKISTAN
Despite a recent capesize bulker delivery to a Gadani ship recycling yard, domestic recyclers faced hurdles this week. They struggled to compete with Chattogram choppers, who maintained their dominance throughout the week, potentially cornering the market for future units from the Far Eastern shipping lanes. There's a possibility they might expand further westward, encroaching on Gadani's territory, especially if Alang buyers delay their return.
Due to the scarcity of available candidates this week, Gadani recyclers discussed the swift acquisition of any potential candidates, reflecting their anxiety about bullish freight markets.
Contrary to historical trends, Pakistani recyclers have outperformed India's offerings lately, driven by domestic needs rather than mere competition. The stability of the Pakistani rupee, coupled with steady local steel plate prices, have bolstered Gadani buyers.
Notably, no new arrivals were reported at Gadani's waterfront this week. Like Chattogram recyclers, Gadani recyclers must prioritise facility upgrades to meet HKC standards, set to come into force in just 16 months.
The total tonnage received in Gadani was around 35,268 LDT this week.
BANGLADESH
Despite receiving promising offers from Bangladeshi buyers and witnessing the emergence of a few smaller LDT vessels in far eastern waters for recycling sales, Bangladesh's waterfront is still grappling with a shortage of available tonnage. Notably, no new vessels have arrived at local anchorage, with those currently present having been there for weeks, awaiting completion of inward formalities.
As domestic ship recycling yards prioritise upgrading facilities in anticipation of the Hong Kong Convention's ratification in 16 months, financing is being redirected from vessel purchases. There's a possibility that the government might impose restrictions on vessel financing and transactions during yard renovations.
Given the persistent tonnage shortage, coupled with the availability of US dollar funding and the impending monsoon season, local buyers are presented with an opportune moment to invest and prepare for potential opportunities when the HKC comes into effect.
The total tonnage received in Chattogram port was around 9,872 LTD this week.
