The sub-continent ship recycling markets are struggling with high fluctuations in currency exchange rates, restrictions in the issuance of Letter of Credit, heavy rains, and dull demand from finished steel users, leading to a significant fall in offer prices and buying capacity.
Ship-breaking import prices dropped by $20/light displacement tonnage (LDT) in all the key markets – India, Bangladesh and Pakistan.
One vessel booked by India
On the sales front in India, a large floating storage unit (FSU) was sold to local buyers last week.
The Indian market has been watching both Pakistan and Bangladesh struggle with historical and unprecedented depreciations in their national currencies.
The Indian Rupee (INR) is too struggling and is currently trading at INR 78.59 against the dollar.
Deals
Total tonnage at Alang Port last week was at 8,768 LDT.
LC restrictions in Bangladesh get stricter
The end buyers of Bangladesh showed buying interest due to scarcity of inventory at the yards, but couldn’t book due to ongoing instability in currency and increasing restrictions in the opening of Letter of Credit.
Deals
Total tonnage reported last week at Chattogram Port was 66,189 LDT, up by 44% w-o-w.
Heavy monsoon rains hit Pakistan
Due to heavy rains, yard activities along with materials transportation from yards have been halted as of now.
There has been a slowdown in buying orders from steel mills throughout the month due to LC opening issues, political instability, and slow construction activities due to heavy rainfall, leading to a continued softening of prices.
The total tonnage at Gadani Port last week was nil.
Prices in $/LDT
Source: SteelMint Research
Outlook
This situation has largely remained unchanged for the past few weeks, leaving a substantial number of recycling yards empty, with little hope for revival anytime soon. It is to be seen at what point prices would attain stability.
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