Ship Recycling: India’s market remains subdued with multiple challenges: STAR ASIA

Ship Recycling: India’s market remains subdued with multiple challenges: STAR ASIA

Alang, INDIA

India’s ship recycling market remains subdued with multiple challenges faced by the industry, especially in Bangladesh where the yards are trying to cope up fixing the yards in accordance with the guidelines set by local authorities before 31th March 2025.

Imported scrap demand is particularly weak, reflected in a widening bid-offer gap. Despite a rally in domestic prices, scrap importers remain resistant to higher offers, citing sufficient domestic scrap availability and currency volatility concerns. With the fiscal year-end approaching, industry participants expect trading activity to remain limited in the short term.

The broader outlook appears challenging as the impending US reciprocal tariffs, effective from April 2, threaten to disrupt export markets and potentially redirect excess steel supply into India. Credit ratings agency S&P Global warns this could trigger a domestic steel price correction of around INR 3,000/ton (US$34.45/ton), potentially delaying full utilisation of India’s newly added steel capacity. The ship recycling sector may face continued headwinds before any meaningful recovery takes hold.

Anchorage & Beaching Position (MARCH 2025)

Chattogram, Bangladesh

Bangladesh’s ship recycling sector continues to operate against a backdrop of persistent inflation, which remained above 9% for the 24th consecutive month despite easing to 9.32% February from January’s 9.94%. The arrival of Ramadan is expected to temporarily slow activities in the ship recycling industry for the first half of the holy month, a seasonal pattern typical of the market.

Despite these challenges, recyclers remain actively engaged in pursuing the limited number of vessels currently available for recycling. Economists suggest that while the recent easing of inflation reflects improved commodity supplies, the sustainability of this trend remains uncertain, potentially affecting the recycling market’s stability in the coming months.

Anchorage & Beaching Position (MARCH 2025)

Gadani, Pakistan

Gadani ship recycling market are seeing signs of revival, with renewed activity through the purchase of 3-4 vessels ranging between 5,000-6,000 LDT at prices around US$440-$450 per light ton. This upturn has brought a welcome sense of optimism to local recyclers who are simultaneously working to upgrade their facilities to meet HKC compliance.

Meanwhile, Pakistan’s financial landscape shows some positive indicators, with the State Bank of Pakistan (SBP) actively building its foreign exchange reserves through dollar purchases from the interbank market. The central bank is working toward a target of US$13 billion in reserves by the end of FY25, a goal being closely monitored by an IMF mission

currently conducting a forensic audit of Pakistan’s economic progress. The country’s total foreign exchange reserves currently stand at US$15.8 billion, with US$4.6 billion held by commercial banks, positioning the market more favorably than in recent months and potentially supporting further recovery in the sector.

Anchorage & Beaching Position (MARCH 2025)

Aliaga, Turkey

Turkish mills have raised domestic scrap prices again this week amid higher imported scrap values. Mills have struggled to source scrap at their target prices due to supply shortages and competition in major sourcing regions. Market sentiment rather than fundamentals appears to be driving markets, creating risk and uncertainty that is further complicated by rapidly evolving US tariff implementations and potential Chinese production cuts.

Turkish shipbreaking scrap prices stood at US$340-357/ton delivered, with the Turkish currency at TRY 36.46/dollar by week’s close.

Sub-Continent and Turkey ferrous scrap markets insight

The imported scrap market across Indian Sub-continent remained largely muted this week as weak demand, tight liquidity, and the ongoing Ramadan period constrained trade activities in key regions. In contrast, Turkey’s scrap market gained momentum, with mills actively restocking amid a bullish outlook and a strengthening euro.

India’s imported scrap market saw limited activity this week as buyers adopted a cautious stance, deterred by a widening bid-offer gap and adequate domestic scrap availability. UK and European-origin shredded scrap was offered at US$375–380/ton CFR Nhava Sheva, while buyers maintained bids lower at US$365–370/ton. Offers for HMS (80:20) hovered at US$350–355/ton CFR, but the absence of firm offers from the US— driven by high freight rates and uncompetitive pricing—further contributed to the subdued sentiment.

In Pakistan, the imported scrap market remained sluggish, exacerbated by weak liquidity and lackluster steel demand amid Ramadan. Mills resisted higher offers, with UK and European-origin shredded scrap priced at US$380–385/ton CFR Qasim, while buyers targeted US$375–378/ton. UAE-origin shredded was offered at US$385–390/ton CFR, with limited room for negotiation. Meanwhile, HMS prices lingered around US$358/ton CFR as domestic scrap prices continued to weaken. With rebar sales slow and production levels reduced, market activity is expected to remain subdued until after Ramadan.

Bangladesh’s imported scrap market faced a downturn this week, hindered by slow LC openings and weak construction activity. Australian-origin shredded scrap was offered at US$380–385/ton CFR, while HMS (80:20) was priced at US$360–365/ton CFR. Hong Kong-origin PNS material was heard at $375–380 per tonne CFR. Limited deep-sea bulk inquiries underscored the cautious sentiment. Malaysian busheling was offered at US$385–390/ton CFR, but a wide price gap between bids and offers impeded deals.

Despite minor improvements in LC conditions, traders anticipate a market recovery only after Ramadan.

In sharp contrast to Sub-continent markets, Turkey’s imported scrap market saw an uptick this week, driven by active restocking by mills and a positive outlook from recyclers. Offers for US-origin bulk HMS (80:20) surged by $9 per tonne day-on-day to US$376/ton CFR. A US-origin deal was confirmed at this price for HMS 1/2 (85:15), while shredded and bonus scrap were sold at US$393.50 /ton CFR. Offers from EU-origin suppliers also rose, buoyed by a strengthening euro and improving domestic rebar demand. An interest rate cut further bolstered market optimism, leading to multiple deals being booked from the UK, EU, and Baltic suppliers. Market participants expect further price gains in the near term.

Ship Recycling Market Snapshot

• All prices are USD per light displacement tonnage in the long
• The prices reported are net prices offered by the recycling
• Prices quoted are basis simple Japanese / Korean-built tonnages trading Premiums are paid on top of the above-quoted prices based on quality & quality of Spares, Non-Fe., bunkers, cargo history, and maintenance.

5-Year Ship Recycling Average Historical Prices

(Week 10)

Ships Sold for Recycling