The south Asia’s ship-breaking scrap market, after a bitterly silent 2022, is poised for some sort of recovery as steel prices inched up especially in India and Pakistan.
The Indian market has remained stable for yet another week. Therefore, the focus will be on the Indian market as majority of market activities and sales are expected to take place here for the upcoming weeks. India is at an advantageous position because Pakistan and Bangladesh are going through Letters of Credit (LCs) restrictions.
Financing remained a major concern in both Pakistan and Bangladesh, with only few end-users being capable of opening new LCs on vessel imports.
Meanwhile, the Turkish market appears to be experiencing its own “private resurgence”, as local steel plate prices increased by $7/t this week, while offers on units are hiked by another $20/t.
Indian prices remain stable w-o-w
Alang buyers increased inquiries of container vessels in the market, which are primarily for HKC green recycling.
Even for non-green recycling units, given India’s financial reserves and ability to open new LCs, it could be the sole and final destination in the subcontinent for recycling candidates.
The Indian rupee has gained some much-needed ground, closing in the mid INR 81 against the USD.
The total tonnage at Alang port last week was 53,668 LDT.
Bangladesh market dormant w-o-w
The Bangladesh market, on the other hand, lacked confidence, ideas, and tonnage after another week of an inability to open LCs.
Although, the end-buyers want to re-offer on tonnage, they simply cannot do so under the current restrictions.
The national currency, Taka, is fluctuating between BDT 102 and 106, ending the week at 104 against the USD.
The total tonnage reported last week at Chattogram port was 64,199 LDT.
Pakistan’s LC restriction continues w-o-w
The Pakistani market has been startled by the sudden inability of domestic recyclers to open new LCs, following the state bank’s recent restrictions on spending their valuable foreign currency reserves of US dollars on ships for recycling.
As a result, Gadani buyers are attempting to open Usance LCs or use private funding rather than going through government state banks to open LCs and have their vessels delivered.
On the domestic front, the Pakistani Rupee has been gradually depreciating, reaching PKR 228 against the USD.
The total tonnage at Gadani port last week was 37,351 LDT.
Prices in $/LDT
Source: SteelMint Research
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