Global offers for ships coming to India for demolition witness a fall of around USD 5-10/MT this week.
Ship-breaking offers in Asia’s largest and most active ship breaking yards namely, India, Bangladesh & Pakistan, encounter a fall upto USD 20/LT LDT (W-o-W), at USD 360-390/ LT LDT.
Currently, in India, apart from dull demand for steel, depreciating currency is turning out to be a major constraint, making Indian buyers resistant to book ship for demolition. Today, INR was recorded at around 64 against USD.
Market participants shared that selling Ship breaking plates at the moment is unrewarding. Domestic semi finished (sponge & billet) prices have fallen sharply in past weeks, which has hampered the demand of ship-cutting plates in domestic market.
“At this juncture, situation here is adverse. Offers for general & tanker cargoes are at USD 370-390/ LT LDT, but in reality we are paying around USD 375/LT LDT for bulk carriers and above USD 420-425/ LT LDT for tankers & container ships; then selling the material (ship-plates) at current levels has become an unprofitable deal” said a ship importer & mill owner at Alang, India.
While buying at Bangladesh & Pakistan remain muted owing to over-bookings made for capesize vessels for June deliveries. Budgets in these two nations are to be announced in the month of June, with this market here is expected to remain silent. Market participants would be waiting for the government’s decision on duty. An increase in duty structure is anticipated in upcoming budget FY16.
Offers for Ships Fell Sharply
Currently, offers for cargoes (ships) to India were similar to Pakistan at USD 370-390/LT LDT (down by USD 10, W-o-W). Whereas to Bangladesh offers slipped further by USD 20/MT in a week’s time at USD 360-380/MT.
Global Ship Offers for Demolition as on 14 May’15
| Delivery | Grade | Prices in USD/LT LDT | W-o-W Change |
| CNF Chittagong, Bangladesh | General Cargo | 360 | – 10 |
| Tanker | 380 | – 20 | |
| CNF Alang, India | General Cargo | 370 | – 5 |
| Tanker | 390 | – 10 | |
| CNF Gadani, Pakistan | General Cargo | 370 | 0 |
|
Tanker |
390 | -10 |
Source: SteelMint Research
Ship Breaching at Alang
Ship breakers at Alang have breached eight ships this May, recovering around 66,706 LDT. A bulk carrier & a general cargo is expected to arrive this week, which would yield around 13,859 LDT.
Meanwhile two vessels (one general & another container type) are waiting to breach & would yield around 25,917 LDT.
Prices at Alang
Market at Alang remain subdued this week. Dull demand of steel had directly hit sale of ship plates. Current offers for 6-8 mm are at INR 24,000/MT, ex-yard. While, melting scrap is offered at INR 21,450/MT, ex-yard.
Domestic Prices of Ship-Cutting as on 14 May’15
| Delivery | Size/Grade | Prices in INR/MT | D-o-D* Change | W-o-W** Change |
| Ex-Bhavnagar | 1 Inch | 25,400 | 0 | – 100 |
| 1-2 Kg | 22,450 | + 50 | – 50 | |
| 2-5 Kg | 24,400 | 0 | 0 | |
| 5-10 Kg | 24,800 | – 100 | – 50 | |
| 6-8mm | 24,000 | 0 | 0 | |
| 9-11mm | 24,550 | – 50 | 0 | |
| 12-14mm | 24,900 | 0 | – 50 | |
| 15-18mm | 25,200 | 0 | – 50 | |
| 19-22mm | 25,300 | 0 | – 50 | |
| HMS(80:20) | 21,450 | – 50 | 0 |
* Day-on- Day
**Week-on-week
Source: SteelMint Research
INR as on 14 May’15 assessed at 64 against USD
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