South Asia: Ship recycling markets see divergent trends; India holds firm, Bangladesh shows recovery

• India's economic stability expected to support recyclers
  
  
• Bangladesh lifts on firmer pricing, new tonnage arrivals
  
  

This week, the South Asian ship recycling markets showed mixed trends. India's Alang benefitted from an influx of specialised units, despite challenges from a weakening rupee. Pakistan remained stagnant due to ongoing financial struggles and a shortage of US dollars. Meanwhile, Bangladesh showed signs of recovery, with firmer pricing and new tonnage arriving at Chattogram, offering hope for a rebound.

India puts up mixed performance, arrival of specialised units boosts demand

This week, Alang's ship recycling market showed a mixed performance. India benefitted from an influx of specialised units, including vessels and oil rigs compliant with the Hong Kong Convention (HKC).

However, the weakening Indian rupee (INR) put pressure on Alang's recyclers, as instability in the currency rate created uncertainty in negotiations. Meanwhile, steel prices fluctuated slightly.

Overall, in 2024, despite a weaker performance, India has managed to acquire a broader range of ships, outperforming Bangladesh. Market stability is expected to continue, supported by steady inflation, the Reserve Bank of India's unchanged repo rate, and rising foreign direct investments. These factors will benefit Alang's recyclers as they prepare for a stronger 2025.

The total tonnage received at Alang Port this week was 37,020 LDT. In the previous week, the port recorded trades of 52,029 LDT.

Pakistan stagnates due to US dollar shortage, financial struggles

This week, Pakistan's ship-breaking market remained inactive due to ongoing economic challenges. Notably, the market has been stagnant with no serious offers for over two months.

A US dollar shortage and tight credit limits further hindered the industry, preventing necessary upgrades to recycling facilities and causing a significant slowdown in operations.

Although local steel prices dropped, largely due to cheaper Chinese imports, there was hope that the expected IMF bailout in early 2025 could provide a much-needed boost to the market, potentially bringing in new tonnage and revitalising the sector.

No tonnage was received at Gadani Port this week, and the port has remained empty for a prolonged period.

Bangladesh shows signs of rebound

Bangladesh's ship-breaking market faced a downturn this week amid ongoing economic challenges. The cluster struggled amid the increased arrival of specialised units in India.

However, overall, signs of recovery were emerging. The market showed resilience this week, with firmer pricing and the arrival of a sizeable bulker at Chattogram indicating a potential rebound.

Steady steel plate prices at $521/LDT and a 6.5% increase in the purchasing managers' index (PMI) in November indicate some economic improvement. However, a weak Bangladeshi taka and slow construction activity due to funding shortages limited growth prospects.

The Ministry of Industries has extended the deadline for compliance with the HKC for safe recycling standards to January 2025, aiming for full implementation by mid-2025, marking progress in aligning Bangladesh's ship-breaking industry with global standards.

The total tonnage received at the Chattogram Port this week stood at 24,960 LDT compared to 16,952 LDT in the previous week.