South Asia: Ship breaking market remains sluggish; Indian market sees deals

The South Asian ship-breaking market was relatively quiet last week. The Indian market saw positive developments yet no confirmed trades, with vessel prices holding firm. In contrast, the Pakistani market was subdued and faced declining prices. In Bangladesh, prices held stable amid problems with opening letters of credit (LCs) and forex shortage. The Turkish market remained stagnant. It is anticipated that older vessels will increasingly arrive in the subcontinental markets during Q4CY23, particularly in the handy/panamax dry bulk and feeder container segments, especially in India and Pakistan.

India

India remains the top choice for ship recycling, with container vessels securing good rates. The recent G20 summit, attended by global leaders, has bolstered India's position by garnering support for international trade and infrastructure projects. Currently, India's average prices for containers and tankers have surpassed those in Pakistan, solidifying its position as the preferred destination for ship recycling.

According to sources, a recent trade was heard involving two Singapore-flagged container vessels, each weighing around 7,000 LDT, sold at $570/LDT. These vessels were sold on an 'as is' basis and are anticipated to arrive at Alang port by the end of September.

Another source informed SteelMint that the demand for ship recycling is currently strong primarily due to the improvement in steel prices. Trade sources anticipate that the second half of 2023 will witness a substantial influx of vessels into India for recycling.

The total tonnage at Alang port last week was 9,471 LDT.

Pakistan

Pakistan's ship recycling market, which had recently regained momentum witnessed a few deals, experienced a slowdown in activity last week. This was primarily attributed to subdued local sentiments. According to sources, no sales were recorded during the week, with buyers adopting a cautious wait-and-watch approach. Additionally, in terms of prices, the Pakistani market slipped to the second place, trailing behind India.

Total tonnage at Gadani port last week was 22,867 LDT.

Bangladesh

The ship-breaking market in Bangladesh continued to languish with minimal sales and unrealistic local offers. Local buyers persisted in seeking vessels below the $500/LDT mark, despite competing markets offering better prices and diverting vessels away. Depreciating local conditions are exacerbated by stagnant steel plate prices and currency depreciation. The market remained at the bottom of the rankings in the subcontinent, with a bleak outlook due to weak local fundamentals and limited LC availability.

Total tonnage received at Chattogram port last week was 50,346 LDT.