South Asia: Ship-breaking tonnage rises 31% m-o-m in Mar'24

In March 2024, the South Asian ship-breaking sector experienced a significant surge, with tonnages increasing by about 31%. The total tonnage processed by India, Pakistan, and Bangladesh amounted to 184,236 LDT, a notable rise from the 140,130 LDT recorded in the previous month. Additionally, on an annualised basis, tonnages saw a 15% increase compared to the previous year's figure of 160,139 LDT.

Breaking down the total tonnage, India reported the highest at around 69,929 LDT (a 194% m-o-m increase), followed by Pakistan at 62,339 LDT (a 5x m-o-m increase), and Bangladesh at 51,968 LDT (a 50% m-o-m decrease).

In March 2024, a total of 19 ships were scrapped, amounting to 184,236 LDT. The majority of these vessels were bulk carriers, followed by containers, general cargoes, and tankers. Bulk carriers accounted for 59,804 LDT, experiencing a 21% decrease from the previous month. Container ships saw a significant increase, reaching 51,507 LDT, up by 108% compared to the previous month. General cargo vessels amounted to 10,702 LDT, a decrease of 60% from the previous month. Tankers amounted to 17,573 LDT in March, a significant increase from the 7,499 LDT in the previous month.

It's worth mentioning that the total number of ships recycled in March decreased by 17% compared to the 23 ships reported in February. However, the tonnage recovered from these ships was higher, thanks to better LDT volumes.

India

In March, India's contribution to the total tonnage reached 69,929 LDT out of 184,236 LDT, marking a remarkable increase of 194% from the 23,821 LDT reported in February. However, Alang, the prominent shipbreaking yard, only received four vessels in March, reflecting a decline of 43% from the seven received in the previous month.

Trade activities remained subdued in March compared to the previous month, primarily due to intense competition from buyers in Bangladesh and Pakistan. Additionally, apprehensions stemming from upcoming elections and uncertainty surrounding policy changes further contributed to buyer skepticism.

Pakistan

Pakistani recyclers substantially increased their contribution to the total tonnage in March, at 62,339 LDT compared to just 11,618 LDT in February. The number of vessels demolished also rose, with seven dismantled during the month compared to just one in February. This surge in tonnage was attributed to improved LC conditions following the elections in February and the absence of recyclers from Alang, resulting from limited buying interest in the market.

Bangladesh

Bangladesh experienced a significant decline of approximately 50% in tonnage, dropping to 51,968 LDT in March from 104,691 LDT the previous month. Eight vessels were demolished during March, down from 15 in February. This decrease in tonnage was primarily attributed to challenges in obtaining letters of credit (LCs), the observance of Ramadan, and a shortage of appropriate tonnage available.