South Asia: Ship recycling market witnesses mixed trends w-o-w

The South Asian ship recycling market presented a mixed landscape this week. India's market saw unexpected high prices despite economic challenges, with significant tonnage delivered to Alang. Pakistan experienced a surprising resurgence, driven by increased inquiries and stable local fundamentals. Conversely, Bangladesh faced a sluggish period with no sales and few offers amid economic struggles and monsoon season impacts.

INDIA

India's ship recycling market saw several units sold to Alang buyers in the last few weeks at unexpectedly high prices despite prevailing market conditions. Local sentiments and offers remain subdued, reflecting the impact of recent economic struggles and inflation. The market received a boost with over 33,000 tonnes (t) of tonnage delivered within a few days. Buyers are keenly awaiting the upcoming budget on 21 July, hoping for continued infrastructure projects under the current government's third term. Concerns persisted about imported cheap steel undercutting ship steel, causing local steel plate prices to drop by $7/t. The Indian rupee has stabilised post-election at INR 83.36 against the US dollar. With a quiet Bangladesh and a resurgent Pakistan, July could see more activity, albeit at potentially lower prices.

Total tonnage received at Alang Port was 33,552 LDT this week.

PAKISTAN

This week, Pakistan's ship recycling market made a surprising resurgence with increased inquiries and offers from Gadani recyclers. Several healthy-sized bulkers arrived, sparking local interest and leading to notable negotiations. Vessels with certain nationality crews that can't disembark in Alang were sold to Gadani recyclers, marking the first sales in some time. Local fundamentals are encouraging, with steady steel plate prices at $705/t and the Pakistani rupee improving to PKR 278.21 against the US dollar. While vessel pricing is still lower than in India and Bangladesh, Pakistan benefits from cheaper agency costs and no beaching tides. The market's future direction remains uncertain but promising.

Total tonnage received at Gadani Port was 17,147 LDT this week.

BANGLADESH

This week, Bangladesh's ship recycling market has been sluggish, with no sales and few reasonable offers. The domestic economy is struggling, and local steel plate prices remain below $600/LDT. The Bangladeshi taka (BDT) continues to depreciate against the US dollar, and the recent budget has failed to address inflation or economic issues. Monsoon season and increased duties on fuel have further dampened local recyclers' enthusiasm. Consequently, buyers are not eager to negotiate, and with weakening prices from India, a quiet July is expected for Bangladesh's ship recycling sector.

The total tonnage received at Chattogram Port was around 16,922 LTD this week.