SOFTER STEEL FUNDAMENTALS AND CRUDE SLUMP DRAG DOWN SCRAP MARKETS: BEST OASIS
A leading cash buyer for ships sending for recycling, BEST OASIS, in their weekly ship recycling report opined that a wave of caution swept across major global ship recycling hubs this week as weak domestic steel demand, falling scrap prices, and a sharp downturn in crude benchmarks collectively dampened market sentiment. From the Indian subcontinent to Türkiye, recyclers are adopting a “wait-and-watch” approach, balancing sluggish production with highly volatile macroeconomic indicators.
The global energy market faced a turbulent week, dealing a psychological blow to heavy industrial sectors. Brent Crude suffered a heavy blow, plunging by $7.83 to settle at $72.54 per barrel down from $80.37. WTI Crude followed a similar trajectory, shedding $7.12 to close at $69.34. This dramatic drop in crude oil, coupled with currency fluctuations across emerging markets, heavily restricted aggressive bidding for fresh tonnage.
Subcontinent Markets Grapple with Local Headwinds
India: Operation Continues at Unprofitable Levels
In India, market sentiment has notably weakened, forcing a correction in local ship recycling prices across all vessel segments. Despite operating at financially unviable levels, a majority of Alang’s recyclers continue to acquire tonnage simply to maintain business continuity and avoid shutting down yard operations.
While the acute labor shortages that plagued the yards over recent months have largely resolved, extreme heat conditions have severely hampered daily production speeds. Experts warn that once weather conditions normalize, a sudden surge in production will increase local steel supply. Amid persistently weak domestic demand, this incoming supply is expected to exert further downward pressure on Indian scrap prices. HMS 1&2 (80:20) prices currently stand at $385/LDT, with shredded scrap at $400/LDT, marking a week-on-week decline of 1.23%.
Bangladesh: Breakers Adopt a Cautious Stance
Following a sharp negative price correction last week, aggressive bidding has entirely halted in Chattogram. Breakers remain deeply bearish, anticipating that prices will bottom out further in the near term before they re-enter the market with any volume.
The primary driver behind this caution is an ongoing slump in the domestic steel sector, characterized by falling finished steel prices and subdued infrastructure demand. Consequently, most Bangladeshi recyclers have retreated to the sidelines. Ship recycling prices remained flat week-on-week, with Container vessels holding at $460/LDT, Tankers at $450/LDT, and Bulkers at $425/LDT.
Pakistan: A Shortened Week Limits Activity
Activity in Gadani remained heavily subdued, primarily due to a shortened three-day working week that restricted overall trading. No significant shifts were noted in local pricing, underlying demand, or recycler buying sentiment compared to the prior week. Market participants are waiting for a full, uninterrupted working week to gauge the market’s true direction, though current sentiment remains technically “firm” relative to its neighbors, with Container prices holding steady at $480/LDT.
Türkiye and Global Sales Review
Across the Mediterranean, sentiment in Aliaga remains soft. The market is feeling the squeeze from lower global mining raw material prices, which have successfully dragged down domestic Turkish steel prices. Limited buying interest in the local steel market has kept overall recycling activity subdued, with container scrap pinned at a quiet $280/LDT.
GLOBAL SHIP RECYCLING PRICES (USD/LDT)
┌────────────┬──────────────┬─────────────┬────────────┬──────────────┐
│ Location │ Market Status│ Container │ Tanker │ Bulker │
├────────────┼──────────────┼─────────────┼────────────┼──────────────┤
│ India │ Soft │ 430 │ 415 │ 400 │
│ Bangladesh │ Soft │ 460 │ 450 │ 425 │
│ Pakistan │ Firm │ 480 │ 470 │ 460 │
│ Turkey │ Soft │ 280 │ 270 │ 260 │
└────────────┴──────────────┴─────────────┴────────────┴──────────────┘
Despite the overarching sluggishness, several key demo sales closed this week. Chattogram, Bangladesh secured the majority of the regional volume, taking delivery of the motor tanker MAI 1 (1,844 LDT), the bulker XIN HAI 18 (1,543 LDT), and the multi-purpose vessel NEPTUNE STARLIGHT (5,130 LDT) for undisclosed amounts.
The highest reported transaction of the week belonged to the bulker ANDHIKA PARAMESTI (9,520 LDT), which fetched a solid $451/LDT on an “as-is” basis in Indonesia. Meanwhile, Europe’s recycling interests were represented by the bulker JAEGER ARROW (5,471 LDT), which was successfully delivered to Aliaga, Türkiye for an undisclosed sum.
Author: shipping inbox
shipping and maritime related web portal
