- Alang benefits as Pak, Bangladesh face HKC delays
- Cheap steel imports pressure Bangladeshi recyclers
South Asia’s ship-breaking markets showed mixed trends last week, with Alang staying active amid regional compliance gaps. Gadani remained sidelined, though it made progress on Hong Kong Convention (HKC) upgrades, while Chattogram struggled with weak demand, low prices, and stockpiles. Ship arrivals fell w-o-w in Gadani and Chattogram but rose in Alang.
HKC-certified Alang yards dominate regional recycling scene
Despite rains and ship shortages persisting, Indian recyclers in Alang dominated the regional ship-recycling market, while Bangladesh and Pakistan remained largely out of bidding due to HKC compliance gaps. Although recyclers resisted paying top prices, Alang secured at least one fresh ship this week.
Over 100 Alang yards are HKC-certified, far outpacing the just 12 certified yards elsewhere in South Asia (all of which are located in Bangladesh). Chattogram and Gadani rushed upgrades as the HKC took effect, causing temporary disruptions as yards adapted to new rules.
Steel plate prices edged up to $427/tonne (t) this week, while the rupee held stable against US dollar. However, if cheaper imported steel continues flooding global markets — as seen recently in Bangladesh — India’s ship steel prices could slide below $400/t, echoing the sharp drop from $500/t earlier this year.
Gadani yards continue to lag amid incomplete HKC certification
Pakistan’s ship recycling sector made progress, with about 10 yards committed to HKC upgrades. However, the move was late, and Gadani lost market share in June, as buyers chose other destinations while Pakistan’s yards stayed uncertified.
Authorities will grant provisional certificates to upgrading yards, enabling limited vessel entries. Yet, without full HKC compliance, Pakistan stayed mostly out of active bidding, keeping India as the main regional ship recycling hub.
Meanwhile, domestic steel plate prices held firm at $616/t, the highest globally, though the Pakistani rupee weakened slightly. The risk remains that cheap Chinese steel under $300/t could pressure recycling prices further, posing further challenges for Gadani’s recyclers.
Monsoon slows Bangladesh scrap sales, recyclers stay inactive
Bangladesh’s ship recycling market became South Asia’s least competitive last week, with owners diverting ships to India or Pakistan due to poor prices and low demand. No significant offers came from Bangladesh, largely because only about 12 HKC-certified yards remained operational, with others still upgrading to meet compliance standards.
Local recyclers struggled to sell recycled ship steel as domestic plate prices slumped amid the monsoon. With no new infrastructure projects since mid-2023, stockpiles rose, further dampening demand and prices.
Despite one Handymax bulker being traded at $390/light displacement tonnes (LDT), cheaper imported steel at around $330/t kept Chattogram buyers on the sidelines. The taka firmed slightly, but the market remained subdued amid ongoing yard upgrades and excess inventories.
Tonnage received last week
Gadani Port witnessed a lack of vessel arrivals, compared to 10,386 LDT in the previous week.
Alang Port received 45,260 LDT, compared with 41,961 LDT in the previous week.
Chattogram Port received 43,532 LDT compared with 85,723 in the previous week.
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