- Regional activity remains uneven across recycling markets
- Currency volatility and steel prices influence buying appetite
Ship recycling markets across the Indian sub-continent showed mixed sentiment in the week ended 17 March, as Middle East tensions and rising energy prices created uncertainty. Most vessel sales were concentrated in Bangladesh, while India and Pakistan witnessing limited deals despite relatively stable domestic demand.
Oil prices continued to rise amid ongoing conflict in the region, while freight markets also strengthened modestly, adding further volatility to recycling markets and influencing buyer sentiment across the region.
India: Competitive pressure limits activity
India’s ship recycling sector remained relatively quiet during the week, as Bangladeshi recyclers secured the majority of available vessels at more competitive price levels.
No confirmed vessel sales were reported for Alang during the period. The Indian rupee depreciated against the US dollar during the week, and domestic steel fundamentals also softened, with local steel plate prices declining to around $410/t, which limited purchasing appetite among recyclers despite steady yard activity.
Despite earlier concerns about fuel shortages, these did not materialize, while inflationary pressures and a weaker currency continued to weigh on buyer sentiment.
Bangladesh: Strong vessel inflow drives market leadership
Bangladesh remained the most active ship recycling destination during the week, with Chattogram yards securing several vessel deals including multiple LNG carriers and handymax bulkers.
Three LNG carriers, each around 28,800 LDT were reportedly sold. Additional transactions included the bulk carriers of around 8,000 LDT, which were also committed to Bangladeshi recyclers. These deals positioned Bangladesh well ahead of competing markets during the week.
The Bangladeshi taka weakened against the US dollar during the week, while local steel plate prices declined by about $4/t to around $502/t, tightening recyclers’ margins.
Operational disruptions were also reported, with fuel rationing and electricity shortages affecting industrial activity and slowing yard operations.
Pakistan: Firm plate prices but limited vessel inflow
Pakistan’s ship recycling market experienced another quiet week, with no reported vessel sales as most recycling candidates were directed toward Bangladeshi yards offering higher prices.
Despite the Pakistani rupee softening against the US dollar, domestic fundamentals remained relatively supportive, with local steel plate prices rising to nearly $599/t, the highest among regional recycling markets, providing recyclers with comparatively strong margins.
Market participants noted that disruptions to scrap inflows from Iran amid regional tensions could continue supporting domestic steel prices in the near term.
Leave a Reply