Highlights of the Week
In India, the market continues to thrive and maintain its leading position this week. Conversely, Pakistan, which was once a close contender, is facing some setbacks. Buyers in Pakistan are exercising caution and waiting for currency corrections before making further purchases. This approach seems plausible, as those who have already made earlier purchases are now facing losses due to the strengthening of the currency. In Bangladesh, the local market has been temporarily closed to address the pricing situation, while the search for a cure for LC ailments continues. Turkiye continues to maintain its current state, reminiscent of the preceding weeks. In a nutshell, the ship recycling scenario is somewhat sunny.
Ship recycling market has seen increased interest from India
Global crude steel output increased 2.2% year on year in August 2023 to 152.6 million tonnes, according to World Steel Association figures. China produced 86.4 Mt in August 2023, up 3.2% from August 2022. India produced 11.9 Mt, up 17.4%. Japan produced 7.1 Mt, a decrease of 2.9%. The United States produced 7.0 Mt, an increase of 1.1%. Russia is anticipated to have produced 6.4 Mt, representing an 8.9% increase. South Korean output fell 5.9% to 5.6 Mt. Germany produced 2.8 Mt, down 1.0%. Turkiye produced 2.8 Mt, a decrease of 2.9%. Brazil produced 2.7 Mt, a 5.9% decline. Iran produced 1.6 million tonnes, a 24.1% decrease. The countries that had the most significant rise in production were India and China, while Iran and South Korea witnessed the largest decline in output.
The U.S. government intends to notify federal employees that a shutdown appears to be approaching, as the Biden administration begins the formal, methodical process of preparing a significant portion of Washington to close down. The resulting disruptions are likely to be substantial, particularly if the impasse continues for weeks, potentially dragging down the fragile U.S. economy and complicating many of the services on which millions of Americans and businesses depend. A month after Fitch downgraded the U.S. on account of the debt ceiling crisis, Moody’s issued a stern warning that a government closure would impair the country’s credit rating. A potential closure would be additional evidence that political polarization in Washington is undermining fiscal policymaking at a time when the affordability of U.S. government debt is under increasing pressure due to rising interest rates.
Exchange Rates:
USD / INR USD / BDT USD / PKR USD / TL
This Week : 83.19 Previous Week : 82.94 Lost : 0.25
This Week : 110.29 Previous Week : 109.69 Lost : 0.60
This Week : 287.57 Previous Week : 288.30 Gained : 0.73
This Week : 27.40 Previous Week : 27.15 Lost : 0.25
Transforming Tides: Alang Ship Recycling Yard’s Evolution Towards Modernization
INDIA
The market conditions exhibit an upward trend, with a notable demand.
The market exhibits strength, characterized by a robust demand.
Some of the yards are currently upgrading their facilities to ensure the highest standards of recycling, as the availability of vessels is limited. India’s steel demand is predicted to be strong for the duration of the current fiscal year, with double-digit growth in consumption due to the country’s developing infrastructure, fast urbanization, and supporting policy changes.
The largest bank in the United States, JP Morgan, announced recently that Indian local bonds will be included in its Government Bond Index-Emerging Markets. The value of India’s bond market exceeds $2 trillion. This action will result in substantial economic benefits for the nation, it is expected to reduce the cost of financing for the government, support the Indian rupee and bond markets, strengthen the country’s credit rating, and contribute to the expansion of the third-largest economy in Asia.
Beaching Dates
28 September to 30 September 2023
01 October to 05 October 2023
14 October to 20 October
BANGLADESH
The local market has been closed, and the prevailing sentiment tends to be subdued.
The local market continues to remain closed in accordance with the request made by the Ship Recycling Association. Moreover, the current circumstances pertaining to the buying side are quite challenging.
The cost of importing HMS has significantly increased in recent weeks, resulting in higher prices. Consequently, when the Ship Recycling market reopens, buyers will likely seek to capitalize on this situation. A few weeks ago, the price of HMS was low, and the difference between HMS and ship recycling prices was significant. As a result, imported material was far more affordable, and no one purchased from ship recyclers, causing prices to decline. This is the reason why the Ship Recycling Association ceased all sales. Now that the majority of the imported material has arrived and been consumed, only a small quantity of material remains, so they must once again begin purchasing from ship recyclers. During this period, we anticipate that market prices will increase.
PAKISTAN
In the market here, buyers are adopting a strategy of caution and evaluation.
The declined to India enthusiasm, and a waiting approach can be observed. However, there are still buyers there who Buyers who had previously acquired the vessel are experiencing substantial financial losses due to currency fluctuations. The cost of steel products is experiencing a decline, prompting purchasers to explore newly imported options at a reduced valuation in PKR.
Pakistan is currently facing challenges in fully capitalizing on the value of fuel onboard vessels, in comparison to India. This lack of competitiveness is evident in certain vessels that have bunkers onboard.
TURKIYE
The market exhibits a state of stability and consistency.
The current market conditions persist in a state of stability, mirroring the trends observed in the preceding weeks.
The Turkish lira has seen a significant depreciation, reaching an unprecedented level of over 27.40 versus the US dollar. This depreciation may be attributed to inflationary pressures and the strengthening of the US dollar. Consequently, the Turkish lira has incurred a year-on-year decline of over 31%.
However, there is a bit of optimism to report as Turkey’s economic confidence index experienced a 1.3% increase month-over-month in September. The index experienced an increase from 94.1 to 95.4 between the months of August and September, as reported by the Turkish Statistical Institute.
Exploring the Intricate Link Between Freight Rates and Ship Recycling
