- Bangladesh leads in tonnage, but market strains grow
- Alang, Gadani recyclers battle adverse economic conditions
South Asia’s ship-breaking markets faced persistent challenges this week, with Bangladesh holding its lead despite economic strain, while India and Pakistan grappled with growing difficulties.
Alang struggled amid weakening fundamentals and rising competition from Pakistan, whereas Gadani remained sluggish despite securing limited tonnage. Tight vessel availability and falling steel prices continue to pressure recyclers across the region.
Alang struggles amid intensifying competition
India’s ship recyclers are under increasing pressure as Alang buyers battle rising competition from Pakistan, despite its recent market slowdown. While supply constraints persist, Alang has managed to secure strong arrivals, with over 40,000 LDT from five sizable vessels, including tankers, dry units, and a RoRo.
Market fundamentals remain unfavorable, with the Rupee weakening against the USD and steel plate prices dropping another $2/t, extending a $17/t decline over the past month. This has made it increasingly difficult for Alang to compete with Bangladesh’s stronger market position.
According to a market participants there are “no new offers or shipping activity. Sentiment remains pessimistic, with no signs of recovery expected for at least six months.”
Another market participant noted, “Cargoes continue moving to Bangladesh, but securing vessels at desired prices is difficult as buyers there offer higher rates. With ongoing pressure on finished goods, market conditions are unlikely to improve soon.”
Alang Port received 41,324 LDT this week, a sharp rise from 7,128 LDT last week.
Recent deal:
- A Japan-origin OFAC-listed tanker was sold at $425/LDT.
Gadani struggles to stay afloat amid uncertainty
Gadani holds onto third place in the market rankings despite ongoing economic struggles, fuelled by an IMF downgrade and unresolved financial aid concerns. Pakistan briefly emerged as a competitive option for vessels west of Sri Lanka, securing a small LDT deal, but activity has since stalled.
With many yards remaining inactive in recent years, top-tier Pakistani buyers show limited interest in select vessels. The market remains sluggish after trailing competitors and recording decade-low sales, setting a challenging tone for early 2025.
India’s weakening recycling market could push Pakistan into second place, allowing it to secure more units before another supply crunch. However, challenges persist, as steel plate prices have dropped $11/t, and the Pakistani Rupee continues to weaken against the USD, adding further pressure to Gadani’s competitiveness.
Recent deals:
- Two handy-sized vessels sold to Pakistan at $440/LDT each.
- A 2,000-t container vessel sold at $415/LDT.
Notably, no new tonnage has been reported at Gadani Port since last week.
Bangladesh balances dominance with growing market strain
Bangladesh’s market faces uncertainty, with price instability growing. However, recent acquisitions totalling over 105,000 LDT from 10 vessels, including LNGs, tankers, and bulkers, are now reaching the waterfront.
Domestic fundamentals remain strained, with plate prices steady at $529/t and the Taka declining over 11% in a year. Inflation stands at 9.98%, while public spending, employment, and investment continue to struggle.
Despite these challenges, strong arrivals of recycled ship steel have kept Bangladesh at the top of market rankings. However, vessel availability remains tight, and market pressures persist.
This week, Chattogram Port received 105,088 LDT, up from 52,434 LDT in the previous week.
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