South Asian ship-breaking market remains sluggish amid limited activity

The South Asian ship-breaking market moved at a slow pace last week. The market saw very few deals as only a few recyclers were able to procure vessels. The rest of the end buyers remained relatively quiet, opting to wait and watch for the market direction before taking decisions. Notably, the price offered by Indian recyclers were below market prices due to lack of demand. Bangladeshi buyers are facing LC issues; however, they are managing to open LCs slowly. The market in Pakistan has been sluggish this past week with no significant changes in the market condition.

India

During the previous week, the Indian market experienced subdued trade activities, with container and tanker prices staying below those of Bangladesh and Pakistan due to weak demand. Additionally, India remained the least favourable market, losing tonnage despite its reliable financial and LC transactions. Offers below $500/LDT were poorly received by ship owners and cash buyers, prompting them to redirect vessels to other recycling destinations or withdraw from the market.

Total tonnage at Alang Port last week was 3,374 LDT.

Bangladesh

Despite facing hurdles in LC approvals, the Bangladeshi market secured a few deals last week. However, only a small number of recyclers have been able to gradually initiate new LCs, limiting their ability to acquire tonnage. There has been a minor fluctuation in prices of containers and tankers.

Nevertheless, the prevailing sentiments and demand in Bangladesh continue to be grim, and these sales are exceptions, not reflecting the actual state of the market. Particularly, the market has become increasingly challenging for most ship owners and cash buyers to navigate.

Recent deals- SOL STRAITS (7,770 LDT), a container, was concluded for an impressive $592/LT LDT and another Roro vessel named TAI HWA (4,043 LDT) was traded for $460/LT LDT, as per a recent GMS report.

Total tonnage at Chattogram Port last week was 51,893 LDT.

Pakistan

The situation in continues to remain unchanged from the previous week, with no deals finalised and prices remaining consistent. Obtaining LCs has remained a significant challenge for market players. However, as per recent update, a deal was confirmed for Pakistan after a pause of 5-6 months, suggesting potential revival. Another source informed of increased flexibility from banks regarding LCs, possibly indicating a resurgence in the market.

Total tonnage at Gadani Port last week was nil.