Ship breaking prices in world’s 2nd largest ship breaking yard rises by INR 600/MT on the back of lower number of ships coming in for demolition.
Indian Ship breaking is experiencing a regular fall in number of Ships for demolition since past six months. Recent Union Budget, which came with no big surprise for Steel industry (especially Ship breaking) has added to the sorrow further.
On the above note, participants kept cheaper imports of Scrap responsible for shift in interest of consumers & suppliers from Ship breaking to imported Scrap.
Imported Scrap prices have fallen upto USD 100/MT in a year (FY 15). Today imported Scrap (HMS 80:20) is offered at USD 265-270/MT and general cargo for Ship breaking at USD 350/MT, with price difference of USD 80/MT, which makes imported Scrap preferable for purchase.
Moreover, recent fall in domestic Steel prices by around INR 1,500/MT (W-o-W), with currency touching low at INR 63.09 against USD last week, has obstructed Indian buyers to show carefree and active participation in global Ship breaking market.
Hence, after experiencing the lower side of Indian Steel market, suppliers are temporarily routing Ships to Pakistan & Bangladesh for demolition. Currently offers for general cargoes to Pakistan (USD 360/MT) & Bangladesh (USD 365/MT) are USD 10-15/MT dearer to India (USD 350/MT), which is also a reason for routing (better realizations).
Prices at Alang up by INR 600/MT
Lack in arrival of Ships for demolition in India has led to temporary price hike. Melting Scrap offers at Alang have witnessed a rise of INR 600/MT (W-o-W), currently offering at INR 22,300MT, basic price.
Ship Demolition Report of Mar’15
India has demolished around 15 Ships this month (Mar’15) of which it recovered around 114,317/ LT LDT. While 7 more vessels are waiting to breach (48,843/LT LDT) and 7 vessels (47,377/LT LDT) are expected to arrive this week.
Global Ship Scrap prices (in USD/MT) as on Week 12, 2015 ( 16 Mar – 22 Mar)
| Particular | Grade | Delivery | Price | W-O-W | M-O-M |
| Bangladesh Import | General Cargo | CNF Bangladesh, Chittagong | 365 | 0 | + 15 |
| Tanker | CNF Bangladesh, Chittagong | 385 | 0 | + 15 | |
| Pakistan Import | General Cargo | CNF Pakistan, Gadani | 360 | 0 | + 10 |
| Tanker | CNF Pakistan, Gadani | 380 | 0 | + 10 | |
| India Import | General Cargo | CNF India, Alang | 350 | 0 | 0 |
| Tanker | CNF India, Alang | 370 | 0 | 0 |
Source: SteelMint Research
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