South Asia’s ship-breaking scrap markets were stalled to their lowest point during 2022. However, it is anticipated that 2023 will be a busier and healthier year for various recycling destinations.
In 2022, only some vessels were beached in India, and it was a similar scenario in Pakistan, Bangladesh, and even Turkiye, where local recyclers had been similarly starved of tonnage.
Moreover, the financial situation in both Pakistan and Bangladesh have begun to cause serious anxiety in the business, with governments in both countries now refusing to authorise new Letter of Credits (L/Cs).
The Turkish ship-breaking market appears to be gearing up for a busy 2023. The country’s market appears to be the only market that started 2023 with a smack, as local steel plate prices climbed over $40/t and nearly $25/t in a matter of weeks.
Indian prices up w-o-w
India has been the most consistent of all recycling markets with Alang reclaiming the first position in the recycling market rankings.
Several Capes and Panamax containers have apparently been committed to local buyers in recent weeks, as Alang recyclers regained their hunger after a year in which a decade-low volume of LDT was beached here.
Fundamentals remained fragile as ever, with the dollar hovering around the INR 82.7.
The total tonnage at Alang port last week was 48,857 LDT.
Bangladesh remains dormant w-o-w
Bangladesh market remained inactive w-o-w as the governments are failing to grant L/Cs on new recycling units, resulting in a status quo.
As a result, the newly arriving vessels have reportedly been turned away and may have to travel to different recycling facilities.
The $1 million limit on fresh L/Cs has resulted in a slew of local recyclers snatching small LDT units only to keep their yards busy for the time being, which shows a strong quantity of small LDT vessels arriving at the local anchorage this week.
Fundamentals for 2023 are not much better, with the BDT nearly reaching 104 against the USD.
The total tonnage reported last week at Chattogram port was 75,392 LDT.
Pakistan market remains inactive with LC restriction
It has been a troubling week in Pakistan at the start of the year, with the government abruptly imposing limitations on new L/Cs, end-buyers and cash buyers stranded on recently committed units, particularly the handful that are currently at Gadani’s waterfront awaiting beaching.
After a disastrous 2022 of decreases, political upheaval, currency chaos, and severe renegotiations, several vessels had to be diverted from Gadani to Alang beaches, leaving Gadani buyers empty handed once again.
Meanwhile, PKR continued to fall into the abyss, approaching PKR 227 against 1 USD.
The total tonnage at Gadani port last week was 36,250 LDT.
Prices in $/LDT
Source: SteelMint Research
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