South Asia: Ship recycling market slow w-o-w due to Ramadan, Eid

The South Asian ship recycling industry experienced a slowdown in the past week. In India's Alang port, stagnant vessel arrivals and tough competition marked the scene. Bangladesh saw subdued activities during Ramadan and Eid preparations, while hopes for a post-celebration uptick prevailed. In Pakistan, festivities slowed down market activities temporarily, but expectations for a rebound post-Eid remained high, supported by firm offers and increased vessel arrivals in Gadani.

INDIA

During the previous week, Alang port maintained its quiet atmosphere, devoid of any news regarding new vessel arrivals, while only previously arrived ships were being beached. This highlighted a concerning trend as Alang fell behind Chattogram and Gadani in ship recycling activity. Notably, Indian ship beachings had reached a recent low in Q1, indicating broader market challenges. Alang buyers faced struggles due to a shortage of tonnage and fierce competition from other markets.

Reports surfaced of local yards being closed due to the absence of viable vessels, with most vessels at Alang being of smaller or specialised types.

However, amidst market uncertainties, there was a silver lining as the Indian rupee strengthened and steel prices experienced an uptrend, offering some relief to buyers. With upcoming elections set to begin on 19 April, buyers are hopeful for a potential market revival.

The total tonnage received in Alang this week amounted to around 15,433 LDT.

BANGLADESH

In Bangladesh, market activities remained subdued due to the ongoing Ramadan and the approaching Eid festival. However, buyers anticipate a resurgence in demand post-Eid. Bangladeshi recyclers, having exhausted recent deliveries, secured fresh financing to bid on the limited supply of vessels, primarily containers, available for recycling sale.

Competition among Chattogram choppers intensified as they vied for vessels, leading to a surge in cash buyer offerings. This week witnessed a notable sale: the Sinokor-controlled 'German-built, container vessel' SAWASDEE SINGAPORE (7,138 LDT) fetched a remarkable $600/LDT, partly driven by its bunkers valued at $20/LDT.

Domestic fundamentals in Chattogram remained stable, with steel plate prices aligning with those in Pakistan, and the Bangladeshi Taka holding steady at BDT 109.62 against the U.S. dollar.

As Chattogram yards prepare to resume operations post-Ramadan and address banking restrictions, hopes are high for a turnaround after a challenging period marked by tonnage shortages.

The total tonnage received at Chattogram port was around 18,678 LTD this week.

PAKISTAN

The Pakistani ship recycling market also experienced a slowdown this week due to Ramadan and Eid festivities. Market activities are expected to resume fully after Eid celebrations. Market participants anticipate firm offers from Gadani buyers, enabling them to secure significant tonnage, as there was a notable increase in vessel arrivals in Pakistan compared to the previous year.

The relaxation of letters of credit (L/C) restrictions and stable steel prices supported Pakistan's market, while the strengthening of the Pakistani rupee against the U.S. dollar further boosted local purchasing power. With India's market likely subdued until after the elections and Bangladeshi prices closely aligned with Pakistan's, the Pakistani market is poised for a potentially robust year in terms of recycling volume.

The total tonnage received in Gadani port was around 19,204 LDT this week.