In February, the South Asian ship recycling market experienced a downturn, marked by a 16% m-o-m decrease in total tonnage. The total tonnage stood at 140,130 LDT, down from 166,386 LDT in the preceding month. Notably, Bangladesh saw a remarkable surge of 90%, whereas Indian and Pakistani buyers reported significant declines of 70% and 64% respectively compared to January.
In the month under review, a total of 23 vessels were scrapped, the majority of which were bulk carriers totalling 76,178 LDT, marking a substantial increase of 180% m-o-m. This was followed by general cargoes at 26,555 LDT, experiencing a slight decrease of 10%, and containers at 24,747 LDT, witnessing a significant drop of 69%.
India
In February, India’s contribution to the total tonnage stood at approximately 23,821 LDT out of 140,130 LDT, signaling a noteworthy decrease of 70% from the previous month’s figure of 79,341 LDT. Notably, the number of ships recycled at India’s Alang port plummeted by 46% from 13 ships in January to only 7 ships in February.
This decline was attributed to challenges encountered by Alang buyers in competing with stronger offers from buyers in Gadani and more assertive Chattogram choppers, compounded by a shortage of tonnage.
Pakistan
During the month, Pakistani recyclers saw a significant decrease in tonnage, with around 11,618 LDT contributed, marking a drop of over 64% compared to the previous month’s 31,967 LDT. Notably, only 1 ship underwent recycling, representing a remarkable decline of 67% from the 3 ships recycled in the previous month.
Market activities remained slow due to national elections scheduled in early February and their subsequent effects. Furthermore, buyers experienced delays in letters of credit (LC) processing and faced fierce competition from Bangladeshi recyclers in terms of pricing.
Bangladesh
In February, Bangladesh recyclers emerged as the top contributors, with a staggering tonnage of 104,691 LDT, showcasing a remarkable increase of 90% from 55,078 LDT recorded in January. The number of ships recycled also rose, reaching around 15, which is a 25% increase compared to the 12 ships recycled in the previous month.
This surge in tonnage reflects an uptick in market demand following the elections in January, along with smoother LC approvals. Additionally, there was a diversion of tonnage due to more favourable pricing from the sellers’ perspective.