- Only 7 yards in Chattogram have HKC accreditation
- Yard upgrades lag behind in Pakistan
South Asia’s ship-breaking markets are facing mounting pressure: Bangladesh is enforcing HKC yard restrictions, Pakistan is struggling with weak pricing and LC issues, while India seems to be witnessing soft market sentiments amid geopolitical tensions, falling steel prices, and a weakening currency. Volumes show inconsistent patterns across ports.
Alang sees limited arrivals
The geopolitical uncertainty has led to a slowdown in India’s ship-breaking market, as declining steel prices and a depreciating rupee have dampened recycler sentiment. The Indian Rupee dropped nearly 1%, and local steel plate prices fell by about $4/t, further pressuring recyclers.
India saw a brief surge in tonnage, including a decent-sized tanker and smaller units at Alang’s anchorage.
According to a market participant, “There is very little happening at the yard right now, with limited activity in ship-breaking. Only small vessels are arriving, and sentiment remains weak amid the ongoing India-Pakistan conflict. There is no significant market impact yet, with sellers mostly waiting and eventually agreeing to lower prices, keeping deals soft. If a global downturn occurs, more ships will become available, leading to cheaper buying rates, similar to the post-COVID situation when vessel demand was low.”
Recent deal:
- Open-origin small container vessel of 2,500 LDT reportedly sold at $490/LDT.
Similar-sized units are quoted at around $505/LDT, but actual deals are closing at slightly lower levels. A buyer reported purchasing a unit at $477/LDT, after sellers had waited for several days before agreeing to the price.
Current offers:
- Tanker offers: $440-455/LDT
- Container offers: $480-490/LDT
Currency depreciation hits Pakistan
Pakistan’s ship-breaking market initially saw increased buying interest and a few locally available vessels. However, this momentum quickly faded due to weak pricing, a depreciating currency, and difficulties in securing Letters of Credit (LCs). As a result, the market slipped back into inactivity, with Gadani yards facing empty spaces and limited new arrivals.
Domestic steel plate prices remain over $100/t higher than regional competitors. This price cushion continues to support recyclers, even though tonnage remains scarce. Pakistani recyclers are lagging behind in yard upgrades, and without the necessary improvements, they may get excluded from the market once the regulations take effect.
Chattogram backlog clears with new NOC restrictions
Bangladesh’s ship-breaking market experienced a shift this week due to changes in the No Objection Certificate (NOC) process. A backlog at OPL Chattogram was cleared as a special exemption allowed ships with facilities holding HKC SoC accreditation to enter. The ship recycling board announced that future sales would be restricted to HKC-accredited yards, with no further NOCs granted to non-certified facilities. Local steel plate prices remained flat at $477/t.
Currently, only seven yards in Chattogram hold full HKC SoC certification, with over 20 others upgrading their infrastructure. The influx of ships to accredited yards has led to a market downturn, as these yards leverage their position to lower prices following the new NOC restrictions.
Last week, Gadani Port received no new vessel, a trend continuing for the last three weeks.
Alang Port received 26,382 light displacement tonnage (LDT) last week, down from 21,968 LDT in the previous week.
Chattogram Port received 37,773 LDT, a decrease from 2,468 LDT in the previous week.
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