The South Asian ship recycling market remained largely stable this week, with varying trends observed across India, Bangladesh, and Pakistan. In India, the market saw a notable rise in domestic steel plate prices and a strengthening of the Indian rupee, boosting local confidence. Bangladesh experienced a quieter week amidst economic uncertainties and a depreciating taka, while Pakistan continued to struggle due to competitive pressures and weak domestic fundamentals.
India
In India, domestic steel plate prices went up by about $5/tonne (t) this week, making the total increase over $35/t. This has given Alang ship recyclers a good buffer for plate prices and vessel offers. Additionally, the Indian rupee (INR), which had been very weak at over INR 83.5 against the USD, improved to INR 83.25 by the end of the week. This improvement boosted local confidence and increased market offer levels for the few available units.
Ship recyclers, ship owners, and cash buyers are keeping a close watch on Alang’s recycling lanes and the election results, expected around 2 June 2024.
Currently, Alang’s ship recycling lanes are busy with small-to-medium-sized ships coming in weekly. With Bangladesh likely to stay out of the market through June and into July due to their own problems, the coming months could be a great time for Alang’s ship recycling industry, something many in the industry have been eagerly waiting for.
The total tonnage received at Alang Port was around 12,016 LDT this week.
Bangladesh
Bangladesh’s ship recycling sector saw a quieter week after notable BDT depreciation sales. Most Chattogram buyers are waiting for market developments due to economic uncertainties. The 2024-25 fiscal budget has received preliminary approval and will be presented to Parliament on 6 June, amidst a widening trade deficit and expected LC restrictions.
The BDT’s depreciation to BDT 117.50 has increased the cost of opening new LCs, challenging the sector. Despite this, Alang buyers are closing in on Chattogram’s pricing, potentially taking the top market spot. Chattogram remains the busiest ship recycling destination, with continuous weekly arrivals.
Rumors suggest the Taka may stabilise by July, improving fundamentals like steel plate prices. If supply issues ease by July/August, the sector could see significant positive changes.
The total tonnage received at Chattogram Port was around 26,346 LTD this week.
Pakistan
Pakistan’s ship recycling market struggled during the week due to competing markets offering unattainable prices, fluctuating vessel prices and downward pressure on local offers.
Domestic steel plate prices remained weak, and the PKR (Pakistani rupee) ended the week at PKR 278.07 against the USD. With limited viable candidates for sale, the market was overshadowed by India and Bangladesh. Gadani’s anchorage has seen no new arrivals, highlighting Pakistan’s challenges. However, Gadani recyclers secured a healthy number of fixtures in Q1, providing a glimmer of hope as the rainy season approaches.
Notably, there were no fresh tonnages in Pakistan this week.
