South Asia's ship-breaking market sluggish; Bangladesh ratifies HKC

The South Asian ship-breaking market did not witness any deals this past week. India is currently behind Bangladesh in terms of demand from local buyers. Pakistan has been out of the market due to persisting economic and political crises. Turkey is facing similar challenges as Pakistan, with both markets struggling to secure tonnage due to currency issues.

Bangladesh ratifies HKC

Last week's major happening in the South Asian ship-breaking market was the ratification of the Hong Kong Convention (HKC) by Bangladesh. In a significant development, the major Asian ship recycler has finally approved the HKC.

In recent weeks, Bangladesh has made diligent efforts, including high-level meetings and visits, leading to the official ratification of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.

This anticipated outcome has been approved by the country's cabinet, with the foreign minister scheduled to execute the ratification and submit the convention to the International Maritime Organization (IMO).

Bangladesh has joined 20 states namely Belgium, Congo, Croatia, Denmark, Estonia, France, Germany, Ghana, India, Japan, Luxembourg, Malta, Kingdom of the Netherlands, Norway, Panama, Portugal, Sao Tome and Principe, Serbia, Spain and Turkiye in ratifying the convention. Being a notable player in the ship recycling space, this development significantly advances the sector and holds implications for sustainable ship recycling worldwide.

However, scrap ship sales in Bangladesh have been sluggish despite stable prices and demand last week. Obtaining Central bank approval for fresh L/Cs post Budget has become challenging, requiring time for resolution.

Total tonnage reported last week at Chattogram port was 55,524 LDT, out of which four vessels arrived with a total tonnage of 40,691 LDT, and one vessel was beached.

Subdued Indian market

India has been striving to catch up with the Bangladeshi market but faced another week of disappointing sales. Critical shortage of tonnage and barren port reports contribute to the challenging situation.

Local port positions are completely empty, similar to the Pakistani market. Bangladesh's progress has diminished India's advantage. Bangladesh is committed to upgrading yards and raising ship recycling standards akin to India's.

Around 36,098 LDT was beached at Alang port last week, However, no new vessels arrived.

Pakistan crisis continues

Similar to the previous week, Pakistan's ship-breaking market continued to remain quiet. Gadani has lagged behind this year in terms of pricing and L/C capabilities. The required yard upgrades for HKC certification have not been made, causing Pakistan's market to fall behind.

Unworkable L/Cs, banking limits, uncompetitive pricing, as well as political, economic, and financial challenges have led to Gadani's exclusion as a viable option in the ship recycling market.

For Pakistan to regain its position in the international ship recycling scene, significant progress and stability in politica and economic conditions will be required in the second half of this year.

Total tonnage reported at Gadani port last week was nil.

Prices in $/LDT

Source: SteelMint Research