South Asia: Ship-breaking tonnage doubles in Oct'24; India leading recycler

• Influx of affordable Chinese steel intensifies competition
  
  
• India's ship-breaking market witnesses massive surge in activity
  
  

The South Asian ship-breaking sector witnessed a near-doubling of activity in October 2024,with India, Pakistan, and Bangladesh collectively dismantling 189,537 light displacement tonnes (LDT) - a staggering more than 150% jump from September's 84,318 LDT. Despite this sharp m-o-m growth, the annualised tonnage saw a significant 38% drop compared to the 282,328 LDT processed in the same period last year.

India: Led the ship-breaking sector in October with 111,815 LDT, a enormous 154% increase from September 44,052 LDT. However, this figure marked a notable decline of 32% from the 165,124 LDT recorded in October 2023.

The Alang ship-breaking yard saw a doubling of ship arrivals, receiving twelve ships for recycling in October, six more than in September.

India's ship recycling market showed positive movement in October, with rising steel prices pushing vessel offers higher and securing its top position in global rankings. However, the weakening Indian rupee and rising oil prices added pressure. Concerns over cheap Chinese steel, which has bolstered Bangladesh's recycling industry, along with fluctuating prices, lagging infrastructure projects, and looming economic uncertainty, kept the market cautious and under pressure.

Pakistan: Recorded 22,746 LDT of ship-breaking tonnage in October 2024, marking an increase from September, when no tonnage was received. On a y-o-y basis, this was a substantial 59% decrease from the 55,391 LDT recorded in October 2023.

Despite this growth, only one ship was recycled in October, compared to none in September.

Gadani Port experienced a significant tonnage shortage, with only one new arrival over the course of almost four weeks. Pakistan's ship recycling market struggled in October due to cheap Chinese steel imports, which forced local mills to lower prices, reducing demand for recycled ships. The slight recovery of the Pakistani rupee wasn't enough to offset political instability, economic challenges, and limited financing. Gadani buyers showed little interest, and competition from India and Bangladesh further pressured the market.

Bangladesh: In October 2024, Bangladeshi recyclers processed around 54,976 LDT, a notable 36% increase from the 40,266 LDT recycled in September. However, on a y-o-y basis, this represented an 11% decline compared to the 61,813 LDT recorded in October 2023.

Eight ships were recycled during the month, the same as in September, indicating stable m-o-m performance.

Despite an increase in tonnage, Bangladesh's ship recyclers faced a tough month, falling behind India in global rankings. Political unrest, severe flooding, and a weakening economy all contributed to the downturn. Steel plate prices fell, and the taka hit a historic low. With demand for recycled steel shrinking and mills idle, the outlook for recovery in Q4 remains uncertain, as the country grapples with ongoing economic instability.