South Asia’s ship-breaking market has seen a bullish trend this week where India is concerned, especially after the dismal first two quarters in particular. It appears that some sales have even happened at prices that rose steadily, instilling confidence in the ship owners to put up their recycling candidates for sale.
Indian prices and demand continue to lead the rankings in the ship recycling industry across the continent. The local mood has improved, as proven by the fact that ships are now routinely being handed to Indian recyclers.
Bangladesh and Pakistan still have financing issues, but end-buyers in both countries are trying to open letters of credit (LCs) using alternative methods. The markets appear to be stabilising and even firming up.
Turkey continues to surprise with soaring plate prices and stable local prices despite a constantly decreasing Lira. It also saw a decline in imported steel prices (by around $15/tonne) while local steel prices were cheaper by about $5/t after a few weeks of steady fundamentals.
Indian prices boost w-o-w
Alang is still the most preferred location for owners and cash buyers due to LC issues and weak steel demand in Bangladesh and Pakistan.
Tonnage movement increases ahead of the slower week (or two) of the Chinese New Year holidays. There have apparently been a number of sales into India this week.
PIONER NIKOLAEV (3,899 LDT), a fishing vessel, was able get sold for a respectable $630/LDT since these vessels carried more non-ferrous metals, which led to a higher unit price.
A container (with heavy propeller and bunkers for voyage), SSL KOCHI (8,362 LDT), was offered at an equally competitive price tag of around $580/LDT based on a Colombo delivery.
This week, India’s fundamentals looked optimistic, and the rupee’s value against the dollar rose substantially from INR 83 to INR 80.9.
The total tonnage at Alang Port last week was 52,741 LDT.
Bangladesh market continues to be dormant w-o-w
Prices in the Bangladesh market are rising, but the frustration still exists as buyers are unable to open LCs and import ships into their emptying yards.
On the other hand, end-buyers are currently looking at alternative methods of financing, such as privately financed LCs or usance LCs, but with little luck so far as prices appear to be firmer.
Bangladesh is performing better than before in terms of its fundamentals. The national currency discovered stability in the currency exchange market which contributed to the steadily rising prices and demand at BDT 105 against the dollar.
The total tonnage reported last week at Chattogram Port was 52,025 LDT.
Pakistan’s persisting LC restrictions a challenge
The Pakistani ship recycling business is in jeopardy since banks are unable to offer letters of credit to import ships for recycling.
Due to recent performance concerns, vessels that were committed are now finding excuses to fail, citing locals’ difficulty in opening new LCs. Almost all cash buyers are currently avoiding the Gadani market.
Currently, the central government bank is refusing to approve new purchases as there is a severe lack of dollars in the country and the PKR is falling steadily. It is presently close to PKR 230 against the dollar.
The total tonnage at Gadani Port last week was 29,730 LDT.
Prices in $/LDT
Source: SteelMint Research
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