Ship-breaking imports into the South Asian markets remained volatile m-o-m in Jun’21. Imports increased into Bangladesh and India while Pakistan saw a sharp fall during the month.
Bangladesh
Bangladesh saw a steep 79% increase in ship-breaking imports m-o-m in Jun’21 as compared to a 25% m-o-m decrease in in May’21. The total volume of ships beached at Chittagong Port last month was reported at 152,308 light displacement tonnage (LDT).
Reason behind the rise in imports-
- Reduction in advance tax (AD): The advance tax (AD) on imports of industrial raw materials had been reduced to 3% from the earlier 4%. Ship imports are expected to increase due to a reduction in this duty.
India
Alang, has also seen a slight 5-6% increase in ship-breaking imports in Jun’21 as compared to a 1.3% m-o-m decrease May’21. The total volume of ships beached at Alang Port last month was 152,308 LDT.
Reason behind the rise in imports-
- Decrease in Covid-19 cases: Covid-19 cases in India have finally started to come down. Oxygen supplies to domestic recycling yards have also resumed, which left a positive impact on overall steel prices/demand and vessel prices in Alang.
Pakistan
The Gadani ship-breaking yard reported a 44% m-o-m fall in its import volumes in Jun’21 as compared to a 21% decrease in May’21. According to sources, the total volume of ships beached at Gadani Port last month was 63,505 LDT.
Reasons behind the fall in imports-
New tanker guidelines: Some additional guidelines had been released with regards to thorough cleaning of tankers arriving in the country. These regulations are now expected to be even more strict in terms of obtaining a ‘gas-free for hot works certificate’ to beach locally.
Analysis
- A total of 26 ships were demolished at Chittagong Port in Jun’21 as against 24 in May’21.
- A total of 25 ships were demolished at Alang Port last month compared to 19 in May’21.
- A total of 10 ships were dismantled at Gadani Port in Jun’21 as against 22 in May’21.
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