India: Alang Ship Breaking Prices fall by INR 3,000/MT M-o-M

Scrap prices in Alang (Gujarat), world’s 5^th largest ship breaking yard, have corrected by INR 3,000/MT M-o-M owing to bearish sentiments. 

Prices of Scrap generated from ship breaking have seen a steep fall in a month’s time on account of seasonal slowdown, monsoon and production cut by smelters & re-rollers across major regions.

Alang ship breaking yard, which contributes nearly 34% of total Scrap production in the country, is supplying the material majorly to Bhavnagar district (Bhavnagar, Mamsa & Sihor), Ahmedabad (Surat & Kandla) and the remaining share to Rajasthan, Mandi Gobindgarh, Maharashtra & MP.

Due to slowdown in the market, prices of vessels (Dry Ship, Box Ship & Tankers) reaching to India for breaking have declined by USD 10-15/MT in last 15 days with current prices hovering in the range of USD 475-500/MT. If the market remains bearish for a long period, we expect prices of vessels to fall further by USD 10-15/MT. 

Less Affect of Depreciating Indian Currency

Indian currency, which has depreciated to the level of INR 61.2 against USD, has slight effect on imported vessels. Scrap traders say that few major factors such as monsoon, less buying from other markets and poor demand of finished steel have led to fall in Scrap prices.

Other Markets

Ferrous Scrap prices in other parts of the country have also witnessed a downfall in the range of INR 500-2,500/MT M-o-M. Market participants are of the view that prices may decline further from current levels on the back of low steel demand and slowdown in infrastructure projects.

Prices in Jalna, one of the largest smelting region and Mumbai, one of the largest consuming state for finished steel, have noticed a price correction  by INR 500/MT from last offers.  On the other hand, prices in Raipur, one of the largest producer of Sponge iron, have fallen by INR 750/MT in a month’s time.