SteelMint: Scrap ship imports in Alang decline by 8%, y-o-y, in FY'22

In FY'22, a total of 579 ships were demolished in India, Bangladesh and Pakistan, according to data maintained with SteelMint.

During this period, the total quantity demolished in the port of Alang was 1,451,560 LDT (208 ships), recording a decline of 8% y-o-y as against 1,577,896 LDT (183 ships) in FY'21.

During Jan-Mar'22, a total of 122 ships have been demolished in the ports of Alang, Chittagong and Gadani out of which 53 ships were reported for Alang.

Drop in imports

• Pandemic impact - The second deadly wave of COVID-19 continued to cause damage across India. As per sources, with recycling yards shut and diversion of all oxygen supplies to local hospitals, it was unsurprising that little focus was given to the ship recycling markets in Alang.
  
  
• Oxygen supply - Lack of oxygen availability was one of the key reasons as the diversion of the entire volume of liquid oxygen which was coming to Alang were redirected to local hospitals for battling the pandemic.
  
  
• Inward clearance - Recycling yards were closed and inward clearance of incoming crew were getting delayed. Many owners were avoiding deliveries to Alang.
  
  
• Transport strike - According to sources, there was a protracted transport strike in Alang, which was not making it possible to move products from domestic yards. All activities were suspended due to the strike announced by transporters protesting against skyrocketing fuel prices amid stagnant freight charges, as per SteelMint reports.
  
  

Scrap movement at Alang's shipbreaking yards later resumed, however.

Container prices

Alang recyclers were eager for tonnage in Q4 CY'21, as Indian ship buyers usually take the top spot in the subcontinent by taking in the largest number of vessels compared to competitors in Bangladesh and Pakistan.

There had been a noticeable improvement in shipbreaking volumes in the Aug'21 period.

Due to active demand and shortage of vessels, container prices touched $680 LDT recently, thereby reaching an all-time high since SteelMint started tracking data from 2017.

Scrap ship import volumes

Present scenario

There is high volatility in prices amidst the ongoing war which has put a lot of pressure on buyers, restraining them from taking positions. Although price levels are elevated, buyers are placing competitive bids owing to the shortage of units in the global ship recycling market.

During these unprecedented times, it has become difficult for buyers to make substantial buying decisions due to the fear of unforeseen changes as the market remains highly volatile.