In the dynamic landscape of South Asian ship recycling, this week brought contrasting fortunes for India, Pakistan, and Bangladesh. India struggled at the bottom of the subcontinent markets due to a severe shortage of suitable tonnage, hindering its ability to attract global recyclers. Meanwhile, Pakistan witnessed a notable resurgence in its ship recycling market, with Gadani Recyclers dominating the tonnage market west of Sri Lanka, buoyed by stable steel prices and a stronger Pakistani Rupee. In Bangladesh, recyclers faced tough competition from Pakistan and a shortage of Chinese-controlled tonnage, despite stabilizing vessel prices and easing financing constraints. Despite these challenges, Bangladesh remained resilient, supported by favorable economic fundamentals and the presence of certified yards in Chattogram catering to environmentally conscious ship owners. As the week unfolded, each country navigated its unique set of circumstances, shaping the landscape of South Asian ship recycling.
Total tonnage received in Alang, India, stood at around 12,496 LDT, while in Gadani, Pakistan, it amounted to approximately 35,268 LDT. In Chattogram, Bangladesh, the total tonnage received was around 9,872 LDT for the week.
INDIA
Throughout this week, India found itself at the bottom of the list among the subcontinent markets, as a large number of recyclers worldwide aggressively pursued opportunities due to a severe shortage of suitable tonnage. This pattern persisted consistently, with India experiencing a dry spell since the conclusion of the last MSC containers back in January. The availability of HKC-compliant tonnage decreased, and chances for specialist or offshore units were sporadic since the beginning of the year. Consequently, India struggled to keep up with the thriving markets of Pakistan and Bangladesh, which had effectively utilised their geographical advantages.
Despite favorable conditions such as a strengthening Rupee, which had reached INR 82.80 against the U.S. dollar by week’s end, the Indian market remained stagnant. Although local steel plate prices showed some stability in recent weeks with minor fluctuations, this did not result in increased local acquisitions.
With elections on the horizon and neighboring competitors making significant strides, desperation mounted within India’s ship recycling sector. It appeared inevitable that activity in Alang would soon pick up, driven not only by demand for HKC-compliant or specialist units but also for all available vessels earmarked for recycling.
The total tonnage received in Alang was around 12,496 LDT this week.
PAKISTAN
The Pakistani ship recycling market has made a notable comeback, overcoming two years of challenges including political instability and L/C restrictions. Gadani Recyclers have re-entered the scene vigorously, outperforming Indian and Bangladeshi rivals and dominating the tonnage market west of Sri Lanka. This resurgence is evident in increased activity at Gadani’s anchorages, fueled by the easing of L/C restrictions and bolstered by stable steel prices and a stronger Pakistani Rupee.
Recent transactions, such as the sale of the Wang Hai, a Cape-size bulker carrying around 20,000 LDT, reflect this revival. The vessel was sold to a recycling facility in Gadani, Pakistan, at a price ranging between $521-528/LDT, signaling the market’s renewed vitality and competitiveness.
The total tonnage received in Gadani was around 35,268 LDT this week.
BANGLADESH
Over the past few weeks, Bangladeshi recyclers found themselves in a tough spot. They faced a sudden shortage of Chinese-controlled tonnage due to the Chinese New Year holidays and fierce competition from Pakistan. Pakistani buyers aggressively tapped into non-Hong Kong Convention tonnage, leaving Bangladeshi recyclers struggling to secure ships. This competition particularly impacted Gadani Recyclers, limiting the availability of tonnage for Chattogram Choppers. Despite a significant drop in vessel prices in 2023, the market stabilized in 2024, attracting eager local buyers. Additionally, easing restrictions on vessel financing and letter of credit constraints since the previous month provided relief. Bangladeshi economic fundamentals remained supportive, with the Bangladeshi Taka holding steady and local steel prices indicating demand from domestic steel mills. The presence of certified yards in Chattogram further bolstered environmentally conscious ship owners. Overall, it was an intriguing period for ship owners and cash buyers, especially with certified yards available to meet environmental standards.
The total tonnage received in Chattogram port was around 9,872 LTD this week.
