South Asia’s ship-breaking imports fall in May’21, impacted by lockdown

South Asia’s recycling market, which covers India, Bangladesh and Pakistan, reported a m-o-m fall in ship breaking imports in May’21.

The Covid-induced lockdowns in these countries, which continued into May’21, as well as the Eid holidays  led to the fall in imports , particularly in Pakistan and Bangladesh.

Bangladesh

Bangladesh, one of the largest ship recyclers that often leads the market, saw a sharp decrease in ship-breaking imports by 25% m-o-m in May’21. The total volume of ships beached at the Chittagong Port last month was reported at 182,743 light displacement tonnage (LDT) .

Major factors behind the fall :

• Lockdown impact: The government had announced a lockdown in mid-Apr’21 which continued into May , leading to shutdown of the recycling yards. This led to local recyclers struggling and the market suffered a setback.
• Eid holidays: The market slowed down a bit as buyers remained on the sidelines due to the Eid holidays which led to limited buying enquiries during the month.
• Tough competition: Pakistan surpassed Bangladesh in terms of prices, such was the growing demand for large LDT vessels from Gadani Port.

India

Alang, one of the world’s largest ship-breaking yards, witnessed a slight 1.3% m-o-m dip in ship-breaking imports   in May’21. The total volume of ships beached at Alang Port, India last month was  144,049 LDT.

Major factors behind the fall:

• Pandemic impact: It was unsurprising that the second deadly wave of Covid-19 kept recycling yards shut.
• Oxygen supply: Oxygen availability was one of the key reasons. Diversion of the entire volume of liquid oxygen that came to Alang was redirected to local hospitals for battling Covid.
• Inward clearances: Many owners were trying to avoid making deliveries to Alang as the inward clearances of the incoming crew were getting delayed.

Pakistan

Gadani ship-breaking yard reported a 21% m-o-m fall in its import volumes in May’21. According to sources, the total volume of ships beached  at Gadani Port, Pakistan last month was 113,033 LDT.

Major factors behind the fall:

• Surge in Covid-19 cases: The ship recycling sector was majorly affected as the yards were forced to shut down due to increasing Covid-19 cases across the country.
• Eid holidays: The Pakistan market remained a little disrupted during the Eid holidays last month. However, demand in the local market was strong.

Analysis

• The total number of ships demolished at Chittagong Port in May’21 was24  as against 21 in Apr’21.
• The total number of ships demolished at  Alang Port last month was 19  compared to 14 in Apr’21.
• A  total of 22 ships  demolished at Gadani Port in May’21 against 13 in Apr’21.