- Pak ship recycling market shows signs of recovery
- Tonnage may shift to India as neighbours lag on HKC
South Asia’s ship-breaking markets faced diverging trends this week, with Pakistan showing brief activity but lagging on HKC compliance, Bangladesh nearing capacity at approved yards, and India under pressure from falling steel prices and currency weakness, dampening overall regional sentiment.
Alang sees no new arrivals in two weeks
India’s ship recycling market is under pressure as local steel plate prices fell sharply by $12/t to $441/t, while the rupee weakened against the US dollar. This worries recyclers, especially those handling large stainless steel units in Alang, where slower processing and weaker fundamentals may hurt margins.
Alang’s offers dropped about 5% in May amid market volatility and buyer concerns. More tonnage may head to India due to Pakistan’s lack of HKC upgrades and Bangladeshi yards busy upgrading. Although Alang accepts specialist vessels like non-ferrous rich and HKC-compliant units, no new vessels have arrived at its Outer Anchorage Point in the past two weeks, with only a few waiting offshore.
According to a market participant, the market remains dull, with limited demand keeping overall sentiment weak.
Current offers
Tanker: $440-445/LDT
Container: $450-455/LDT
Freight rates and HKC push threaten Gadani
Pakistan’s ship recycling market has shown some activity recently, with buyers acquiring a few small LDT vessels, ending a month lull at Gadani and even outpacing India in arrivals this week. However, progress on HKC compliance remains slow, and with the deadline looming.
The overall condition of Gadani yards remains weak, with most facilities idle for much of the past two quarters. Local buyers are still far from starting meaningful HKC infrastructure upgrades, casting doubt on Pakistan’s ship recycling future and limiting its ability to attract fresh tonnage.
With rising freight rates and limited vessel availability, shipbreaking activity in Gadani is likely to remain subdued through mid-2025.
Chattogram capacity constraints
Bangladesh’s ship recycling market faced a mixed outlook, with only 2-3 more yards likely to gain HKC approval before the deadline. Of the nine already approved, many are inactive or nearing capacity due to recent cash buyer deliveries. With limited HKC-compliant space left, upcoming tonnage may shift to other markets. As a result, buying activity has slowed, and prices are easing as yards prioritise processing recent arrivals under HKC norms.
Despite this, steel plate prices stayed fairly stable, dropping just $1/t to $555/t, which along with strong margins-second only to Pakistan has supported steady demand. Bangladesh led regional ship recycling this week, welcoming at least two HKC-approved vessels at Chattogram, outpacing India and Pakistan in arrivals.
Last week, Gadani Port received 10,176 LDT, which was muted in from past 1.5 months.
Alang Port received 12,206 light displacement tonnage (LDT) last week, same from previous week.
Chattogram Port received 24,634 LDT compared with 53,614 LDT in the previous week.
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