- Steel price recovery fails to revive Alang market
- Pakistan’s ship-breaking sector stalls amid geopolitical tensions
South Asia’s ship-breaking markets are experiencing significant challenges, with tensions between India and Pakistan impacting trade and vessel supply. While steel prices show minor gains, economic instability, geopolitical issues, and tight margins are limiting market recovery, especially in Pakistan and Bangladesh.
Alang recyclers face margin squeeze
India’s ship-breaking market in Alang started May on a weak note, with limited sales and mostly small LDT vessels arriving at yards. Despite handling the most tonnage in recent weeks, recyclers remain cautious. Expectations of a pre-monsoon boost have not materialised.
The slowdown is driven by geopolitical tensions with Pakistan and broader market uncertainty. Additionally, domestic steel price volatility and competition from Pakistan, despite that country’s own struggles, have added further pressure.
According to a market participant, “The recent rise in steel plate prices isn’t helping the ship-breaking market. With limited vessel supply, most deals are being closed at a loss. Price changes alone will not make a difference unless vessel availability improves.”
Another participant commented, “Steel plate prices recovered $8-10/t after an early dip, but the rebound was not enough. Recyclers remain under pressure with tight margins and weak sentiment, limiting fresh buying interest.”
Current offers:
- Tanker offers: $465-470/LDT
- Container offers: $475-480/LDT
- Bulker ship offers: $435/LDT
Gadani recyclers face tough conditions
Pakistan’s ship-breaking market has slowed down to the point of a complete halt, with no fresh vessel sales or arrivals reported for the second straight week. Activity has stalled completely and yard operations remain quiet. Prices for end-of-life vessels have declined, and the market mood is largely pessimistic.
Tensions between India and Pakistan have triggered shipping bans and trade curbs, causing recyclers to avoid new deals. Falling steel prices, a weak Rupee, and pending HKC upgrades add pressure, with recyclers holding back amid fears of prolonged disruption.
According to a market participant, “Pakistan’s ship-breaking market remained inactive last week, with no notable movement. A $10-15/t drop in local steel plate prices to $610-615/t further hurt recyclers.”
HKC checks disrupt vessel flow to Chattogram
The ship-breaking market was nearly paralysed in April as HKC checks halted NOC issuance for over five weeks, blocking vessel entries into Chattogram. This stalled LCs and deliveries, with only one small vessel beached. Many ships were diverted to India and Pakistan.
Although a breakthrough came in early May, with authorities resuming NOC and HKC approvals for compliant yards, market fundamentals remain weak. Local steel plate prices are stuck at $475-80/t. As a result, steel trade is still sluggish, and recyclers are hoping for a steady flow of vessel clearances to ease the supply crunch.
With the HKC deadline approaching on 26 June and the monsoon season just weeks away, the next two months are expected to be busier, assuming regulatory clearances continue smoothly.
Last week, Gadani Port received no new vessels since last two weeks.
Alang Port received 21,968 light displacement tonnage (LDT) last week, down from 39,334 LDT in the previous week.
Last week, Chattogram Port received 2,468 LDT, a decrease from 6,509 LDT in the previous week.
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