South Asia: Ship recycling market see mixed trend w-o-w; tonnages improve in Bangladesh

This week, the South Asian ship recycling market witnessed varied trends across its key players. In India, despite recent positive indicators, such as improved offers and increased tonnage, the market remained subdued amidst the ongoing Lok Sabha elections. In Pakistan, the market faced another week without firm tonnage, primarily due to heightened caution following recent attacks in the Red Sea shipping lanes. Meanwhile, in Bangladesh, the ship recycling industry saw a significant turnaround after enduring challenges, with recent market fluctuations and increased tonnage filling Chittagong's anchorage.

India

This week, the Indian ship recycling market remained subdued despite recent positive indicators, such as improved offers and increased tonnage. The dullness was largely attributed to the ongoing Lok Sabha elections. While there is a growing sense of optimism surrounding the current prime minister's expected re-election, Alang still trails behind its sub-continent counterparts. The market is expected to remain subdued for the next couple of weeks, with ongoing elections and economic uncertainty post- June when election results will be announced. Alang finds itself in a pivotal role as a decision-making centre for ship owners and cash buyers weighing options for non-HKC tonnage between India and its better-priced neighbours. Additionally, domestic fundamentals, like the fluctuating Indian rupee and sliding steel plate prices, added to the market's uncertainty.

The total tonnage received in Alang port was around 42,925 LDT this week.

Pakistan

The Pakistani ship recycling market has faced another week without any firm tonnage, largely due to ship owners avoiding the Red Sea shipping lanes following recent terrorist attacks. This cautious approach intensified after a vessel sank due to the attacks. Local fundamentals, including flat-lined steel plate prices and a weakening PKR (Pakistani rupee), contribute to the subdued market atmosphere.

The total tonnage received at Gadani Port was around 5,282 LDT this week.

Bangladesh

The Bangladeshi ship recycling market experienced a turnaround after enduring four challenging quarters marked by banking and LC restrictions, tonnage shortages, and unreliable fundamentals. The easing of LC hurdles in 2024 allowed domestic recyclers to acquire tonnage again, but the trickle of available vessels posed challenges. However, recent market fluctuations and the pre-monsoon surge have filled Chittagong's anchorage impressively, potentially leading to a 'fire sale' before the rains. Despite weekly jitters, domestic fundamentals support ongoing vessel pricing. With India's pending infrastructure projects set to boost the economy, along with Pakistan's diminishing levels, Bangladeshi recyclers are poised for better times.

The total tonnage received at Chattogram port was around 109,638 LTD this week.