- Market turns cautious amid fresh US tariffs
- Ship-breaking offers dip across all 3 regions
South Asia’s ship-breaking markets saw steady momentum this week. India remained cautious despite firm market fundamentals, which helped Pakistan surpass India in terms of arrivals. Meanwhile, Bangladesh slowed down due to the Eid holidays and tariff concerns. Offers dipped across all regions, as recyclers maintained a wait-and-watch stance amid limited tonnage and economic uncertainty.
Sellers hold back in Alang, no major deals finalised recently
India was cautious in the ship-recycling market amid the US imposing a 26% tariff. However, domestic fundamentals remained strong, with steel plate prices rising to $474/tonne (t) and the rupee firming up against the US dollar, boosting buyer sentiment.
Most vessels in recent weeks have gone to Bangladesh, with India receiving only limited HKC-compliant units. Market volatility may bring more vessels in Q2, though no major drop in prices is expected yet.
However, an expected interest rate cut by the Reserve Bank of India (RBI) may support the sector, though activity is likely to stay muted in the near term due to limited tonnage.
Current offers are as follows:
Tanker: $455-465/LDT
Container: $465-475/LDT
A market participant noted, “Despite these price indications, no deals have been finalised, as market participants have adopted a wait-and-watch approach. Sellers are holding back.”
Alang Port received 5,046 light displacement tonnage (LDT) last week, down slightly from 6,517 LDT in the previous week.
Recent deals
A small Japanese-built container vessel, “Gluon” (4,000 LDT), was sold for recycling at $477-478/LDT.
Pakistan sees progress, but HKC compliance remains slow
Pakistan’s ship recycling market saw a modest rebound and a steady inflow of small LDT vessels from the Middle East. Around 20,000 LDT were either delivered or awaiting delivery, making Gadani the most active yard behind Bangladesh in the subcontinent last week.
However, larger tonnage continued to head to India and Bangladesh. Additionally, a $40/t decline in domestic steel plate prices to $624/t and a weakening rupee curbed aggressive buying sentiment. The new 29% tariff on exports to the US added further pressure on Pakistan’s fragile economy.
Some deals were concluded, but progress on compliance with the Hong Kong Convention (HKC) was slow. Yard upgrades were underway, and Ramadan kept market activity muted across the region.
According to a market participant, “no major deals have been concluded so far this month. The market is currently in a wait-and-watch mode following a relatively active March, during which five vessels were sold for recycling.”
Current offers are as follows:
Tanker: $460-465/LDT
Container: $470-475/LDT
Last week, Gadani Port received 19,665 LDT, rising from 11,665 LDT in the previous week.
Bangladesh remains strongest market despite slowdown
Ship recycling activity in Bangladesh slowed down this week due to the Eid holidays, which halted yard operations. Additionally, steel plate prices remained subdued for the seventh consecutive month, while the Bangladeshi taka continued to weaken against the US dollar amid concerns over a potential 37% tariff. Tonnage supply remained tight, with no fresh arrivals observed, apart from a few older deliveries, such as the vessel “Three Star”.
Despite being the strongest market in the subcontinent, local offers fell by $5-10/LDT as recyclers grew increasingly cautious. Uncertainty surrounding the upcoming HKC yard upgrade deadline added to the prevailing wait-and-watch approach.
Last week, Chattogram Port received 60,529 LDT, down slightly from 61,859 LDT in the previous week.
Leave a Reply