Ship Recycling Markets Remain Cautious Across South Asia Amid Currency Pressures and Weak Steel Demand: BEST OASIS
The latest report from leading ship recycling cash buyer BEST OASIS highlighted that the global ship recycling market witnessed a subdued trading week, with major South Asian markets showing cautious sentiment amid weakening steel demand, currency volatility and slowing industrial activity. While prices largely remained stable across India, Bangladesh and Pakistan, buyers continued to adopt a selective approach toward fresh tonnage purchases.
India, one of the world’s leading ship recycling destinations, experienced softer market conditions this week as the strengthening US dollar against the Indian rupee added pressure on local recyclers. The exchange rate moved to ₹95.91 per US dollar from ₹94.48 last week, increasing import costs for buyers and affecting overall market confidence.
Industry sources said Indian recyclers are facing mounting challenges from higher operational costs, sluggish construction activity and weaker domestic steel demand. These factors have reduced buyers’ willingness to commit to purchases at current price levels.
Despite the broader slowdown, specialized vessels are expected to continue attracting interest from Indian recyclers due to their comparatively higher recovery value and niche demand. However, overall buying activity is likely to remain selective in the near term.
Ship recycling prices in India remained firm, with container vessels quoted at around USD 420 per light displacement tonnage (LDT), tankers at USD 405/LDT and bulkers at USD 390/LDT. However, the market registered a week-on-week decline of 2.41 per cent.
In neighbouring Bangladesh, the market remained broadly stable compared with the previous week, though trading activity slowed significantly due to persistent rainfall. Several recycling yards are currently well stocked, reducing the urgency among buyers to acquire additional tonnage.
Market participants indicated that demand is expected to stay cautious until weather conditions improve and existing yard inventories begin to decline. Prices in Bangladesh held steady at USD 470/LDT for container vessels, USD 460/LDT for tankers and USD 435/LDT for bulk carriers.
Pakistan’s recycling market also remained largely unchanged, supported by tight supply conditions. Limited inflows of scrap, heavy melting steel (HMS) and shredded material from the Middle East continued to underpin pricing levels.
Fresh vessel availability in Pakistan has also remained restricted, helping recyclers maintain firm price expectations despite subdued transaction activity. Current pricing stood at USD 465/LDT for container ships, USD 460/LDT for tankers and USD 445/LDT for bulkers.
Analysts noted that Pakistan’s relatively stable exchange rate, which strengthened marginally to PKR 278.56 per US dollar from PKR 278.71, helped maintain market confidence.
Meanwhile, Türkiye’s recycling market remained stable but subdued, with the depreciation of the Turkish lira continuing to weigh heavily on buyer sentiment. Market participants said fresh tonnage activity remained muted as recyclers struggled with currency volatility and rising financing costs.
Most Turkish recycling yards, particularly those approved by the European Union, are operating at high capacity levels, leaving limited room for prompt deliveries. This has encouraged buyers to adopt a wait-and-watch strategy.
Ship recycling prices in Türkiye were significantly lower than South Asian markets, standing at USD 290/LDT for container vessels, USD 280/LDT for tankers and USD 270/LDT for bulkers.
The broader scrap market also remained stable during the week. Prices for HMS 1&2 (80:20) scrap were unchanged at USD 410 per tonne in India and Türkiye, while Bangladesh and Pakistan maintained levels at USD 415 per tonne. Shredded scrap prices similarly held steady across major recycling destinations.
Global energy markets, however, showed a notable rise. Brent crude prices increased by USD 6.64 to USD 107.84 per barrel, while West Texas Intermediate (WTI) crude climbed USD 8.84 to USD 103.79 per barrel. Rising fuel prices are expected to add further cost pressures on shipping and recycling operations globally.
Among vessel transactions reported this week, the MSC Baltic III, a container vessel with 10,809 LDT, was sold on a delivered basis in Canada, while the Hanjin 3007, a RoRo vessel with 3,665 LDT, was sold as-is in Korea at USD 415/LDT. Other reported sales included the NQ Zinnia motor tanker, the bulker Dong, and the multipurpose vessel Srakane.
Industry observers expect the ship recycling sector to remain cautious in the coming weeks as recyclers monitor steel demand trends, currency fluctuations and vessel availability across key markets.
Author: shipping inbox
shipping and maritime related web portal
