South Asia's imported ship-breaking market experiences w-o-w slowdown

South Asia's imported ship-breaking market continued to remain sluggish for yet another week with no trade activities recorded in the sub-continent along with declining price trend. The Indian market, which is dominant, has also witnessed a drop of approximately $20/LDT in ship prices. Meanwhile, Bangladesh and Pakistan are facing challenges in securing the necessary financing to establish functional Letters of Credit (LCs).

INDIA

The Alang ship-breaking market has seen a drop of around $20/LDT over the past few weeks. Many Indian recyclers have adopted a "wait-and-see" approach, monitoring market developments rather than actively engaging in negotiations or offering new deals. The recent decline in vessel prices from India is primarily attributed to the ongoing volatility due to festive season and decreases in domestic steel plate prices. Despite these challenges, the Indian Rupee has remained relatively stable against the U.S. Dollar, demonstrating economic stability compared to other recycling locations facing inflation.

The total tonnage received at Alang port last week was 27,054 LDT.

BANGLADESH

While the Bangladeshi economy has been facing challenges lately, there have been occasional high-value sales to top local recyclers that defy the prevailing economic conditions in the Chattogram market. Some weeks ago, it was reported that a Suezmax Tanker and several Feeder Containers were sold to local buyers with favorable payment terms at surprisingly high prices. This was mainly done to keep their yards operational and maximise their financial limits from banks while minimizing operational losses. The Bangladeshi Taka's exchange rate, trading above BDT 110 against the U.S. Dollar, has been a cause of concern for local businesses, as per a recent GMS report.

The total tonnage received at Chattogram port last week was 43,714 LDT.

PAKISTAN

Currently, Gadani is facing a challenging situation with no prospects of concluding new deals. The country's economy and currency have once again experienced significant depreciations, leaving potential buyers uncertain about the future economic direction of the country.

However, it appears that the primary reason for the recent lack of activity in Pakistan's recycling industry is the ongoing shortage of workable LCs and bank approvals. This has resulted in a continued absence of transactions with local buyers, as reflected by the empty port in Gadani, which has seen no new vessels for a second consecutive week.

As per sources, it is expected that Gadani Recyclers will have a quieter Q4 until the LC-related challenges are resolved and streamlined.

The total tonnage received at Gadani port last week was nil.