South Asia's imported ship recycling market witnesses mix price trend in India and Pakistan

As 2023 concludes, South Asia's ship-recycling market faced subdued activity, with minimal deals in the final weeks. Dry bulk supply stagnates as owners await potential improvements in recycling prices in the coming year. Notably, the UAE introduced regulations requiring vessels calling its ports to undergo Hong Kong Convention recycling from March 2024, excluding beaching or landing methods. Uncertainty surrounded the implications as stakeholders sought clarity in anticipation of a potentially active phase for ship recycling in the years ahead.

INDIA

Amid a cautious Indian market, local ship sales have seen some improvement, primarily in the container sector, expected to persist in the coming years. Noteworthy is the recent sale of SSL DELHI (10,669 LDT) by Transworld Group at $532/LDT, including 100 t bunkers for the voyage to Sri Lanka.

Sources report that a 10,000 LDT container vessel is being heard at levels approximately between $535-$540/LDT. The market is currently marked by subdued demand, possibly influenced by year-end dullness. A clearer understanding of market dynamics is expected around mid-January, indicating a period of uncertainty and sluggish activity until then. Additionally, the market is grappling with a currency crisis, with reported delays in receiving payments.

The total tonnage received at Alang port last week was 16,095 LDT.

BANGLADESH

Bangladesh has faced a challenging second half of the year, marked by persistent strikes and a shortage of available financing, resulting in limited workable LCs for cash buyers. The upcoming nationwide elections on 7 January are eagerly anticipated, although prospects for a change in government to stimulate the economy seem unlikely.

The market remains stagnant, as port reports indicate empty yards. Hopes are pinned on the second part of the IMF loan, expected to inject approximately $600 million, potentially easing LC capabilities and prompting a resurgence in buying activity.

The total tonnage received at Chattogram Port last week was 527 LDT.

PAKISTAN

In the past week, Pakistan has yielded its position as the top subcontinent market to India, primarily due to a lack of new LC approvals following the recent Panamax bulker sales. Despite stable steel prices, a settled currency, and available plots, the market is hindered by insufficient financing and LC capacity, posing a significant obstacle to new transactions. Looking ahead to the next year, there is optimism for the resolution of this volatile and unpredictable situation, anticipating a resurgence in activity for Gadani buyers.

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