Improved demand for steel in past 10 days has supported ship breaking market in India; offers rise by USD 25-30/MT.
The past week was the most active week for ship breakers after a long time. With rise in steel prices in last 10 days in India, ship breakers also tried there best to capitalize on the situation. Despite of falling INR, many inquiries were seen in the market. Immediate demand for steel (billet) in market, along with raw material shortage, shot up the Indian ship-plate offers about INR 2,000/MT and ship breaking offers by USD 20-30/MT.
Small bulkers in India of around 5,000 MT are offered at USD 310/MT whereas, bulkers above 10,000 MT are offered at USD 320-325/MT. Containers are offered at a premium rate of USD 350-355/MT.
Alike India, Pakistan too looked active during the entire week. However, Bangladeshi buyers seemed hesitant about booking ships after receiving cheaper offers for billet from China.
Bangladesh, after currency devaluation in Yuan is receiving offers for billet at USD 315/MT, CFR Chittagong (USD 10-15/MT lesser than previous week), while tankers to them would cost around USD 320-325/MT, CFR Chittagong.
Global Offers for Ship-demolition as on week 35
| Particulars | Size/Grade | Prices | W-o-W | M-o-M |
| CNF Alang, India | General Cargo | $315 | + 25 | + 15 |
| Tanker | $330 | + 20 | 0 | |
| CNF Chittagong, Bangladesh | General Cargo | $300 | + 40 | 0 |
| Tanker | $320 | + 30 | – 10 | |
| CNF Gadani, Pakistan | General Cargo | $320 | + 40 | + 20 |
| Tanker | $345 | + 35 | + 15 |
Source: SteelMint Research
Prices at Alang
Indian ship-cutting plates prices witnessed an uptick of around INR 1,500-2,000/MT in last 10 days. This pick up in demand of steel (billet/ingot) has also led to price rise of domestic scrap and sponge, along with imported scrap.
A ship breaker at Alang shared, “Steel prices have picked up sharply by INR 2,500-3,000/MT in last 10 days due to temporary shortage of raw-material in few major (north) markets. However, we don’t see these prices sustaining for long and expect prices to fall back to previous levels coming days.”
Ship-Plates Offers at Alang India, as on 28 Aug’15
| Particular/Delivery | Size/Grade | Prices in INR /MT | D-o-D | W-o-W | M-o-M |
| Ex-Bhavnagar | 1 Inch | 23,600 | – 300 | 300 | 2,550 |
| 1-2 Kg | 20,000 | – 450 | -300 | 1,300 | |
| 12-14mm | 23,100 | – 250 | 400 | 2,600 | |
| 15-18mm | 23,400 | – 300 | 300 | 2,550 | |
| 19-22mm | 23,500 | – 300 | 300 | 2,550 | |
| 2-5 Kg | 22,400 | – 350 | 400 | 2,400 | |
| 5-10 Kg | 22,900 | – 300 | 300 | 2,500 | |
| 6-8mm | 22,000 | – 200 | 500 | 2,800 | |
| 9-11mm | 22,600 | – 200 | 400 | 2,400 | |
| HMS(80:20) | 19,300 | – 200 | -200 | 1,950 |
Source: SteelMint Research
Bhavnagar Ship-breaking Stats
Indian ship breakers have breached around 7 ships this Aug, recovering around 63,908 MT of ship plates and melting scrap. Around 3 cargoes (one general, one bulker and one oil tanker) are waiting to be breached and a bulker carrier of 17,992 MT is expected arrive.
Indian ship breakers in July’15 breached around 13 ships , recovering 99,282 MT of mealting scrap and ship plates .
Outlook
Chinese mills have already began to reduce their billet export offers, post currency devaluation. Their is a further anticipation of price cut in global steel market ones the close Chinese mills restart their operations after 5 Sept’15, which calls for an alert for rest of the steel making economies.
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