India Ship Recycling Market Remains Subdued as Weak Steel Demand Weighs on Sentiment: BEST OASIS
The global ship recycling market presented a mixed picture this week, with India continuing to face subdued trading conditions due to weak domestic steel demand, while Bangladesh and Pakistan maintained firm market sentiment supported by healthy buying interest. According to the latest weekly market report by leading cash buyer Best Oasis, Turkey also witnessed a modest improvement in steel prices, although vessel prices remained largely unchanged.
India Faces Weak Demand Despite Stable Steel Prices
The Indian ship recycling market remained under pressure during the week as sluggish demand for recycled steel products continued to dampen market activity. While local steel prices showed signs of stability, industry participants believe the current price levels may prove temporary because of weak demand from end-users.
The report noted that subdued consumption of finished steel products has limited momentum across the recycling sector, reducing buyers’ willingness to aggressively bid for demolition candidates. Market participants expect trading activity to soften further over the coming weeks unless domestic steel demand improves significantly.
On the regulatory front, the report highlighted a positive development for India’s ship recycling industry. Two Indian recycling facilities have been recommended for inclusion in the European Union’s approved list of ship recycling yards. However, Priya Blue Industries was not included in the latest recommendations. Despite this setback, market observers remain optimistic that the company could be considered in the next round of approvals.
The inclusion of additional Indian yards in the EU-approved list is considered an important milestone for Alang, the world’s largest ship recycling destination, as it would enable more European-flagged vessels to be recycled in India under the EU Ship Recycling Regulation.
Bangladesh Retains Strong Momentum
Bangladesh continued to lead the South Asian recycling markets with firm buying sentiment throughout the week. Buyers remained actively interested in acquiring additional vessels despite relatively subdued local market activity.
According to Best Oasis, prices remained firm as sustained purchasing interest offset the slower pace of domestic trading. Limited availability of suitable vessels also helped support price levels.
Bangladeshi recyclers continued offering the highest prices in the region, reflecting strong competition among buyers seeking quality demolition candidates.
Pakistan Remains Optimistic
Pakistan’s ship recycling market also remained buoyant, with buyers actively searching for suitable vessels for recycling.
The report noted that ships ranging between 7,000 and 10,000 light displacement tonnes (LDT) remained the preferred size among Pakistani buyers.
Although recyclers in Pakistan are still unable to match the higher prices offered by Bangladesh, overall market confidence remains positive. One key factor supporting sentiment is the limited availability of imported steel, particularly as reduced supplies from Iran are expected to strengthen demand for locally recycled steel.
However, the report cautioned that Pakistan’s broader economic outlook remains a concern. A sharp increase in fuel prices over the past eight to ten days is expected to increase inflationary pressures, which could eventually affect market confidence and buying capacity.
Turkey Records Mild Improvement
Turkey’s recycling market registered a modest recovery during the week, with imported and domestic steel prices increasing by around USD 4 to USD 5 per tonne.
Despite firmer steel values, ship recycling prices remained unchanged as buyers continued adopting a cautious approach. The report said improved steel fundamentals have yet to translate into higher vessel prices.
Ship Recycling Prices
Among the major recycling destinations, Bangladesh continued to offer the highest prices.
- India: Container vessels at USD 450/LDT, tankers at USD 420/LDT and bulk carriers at USD 405/LDT, unchanged from the previous week.
- Bangladesh: USD 500/LDT for container vessels, USD 490/LDT for tankers and USD 445/LDT for bulk carriers, recording a weekly gain of 1.06%.
- Pakistan: USD 480/LDT for container vessels, USD 470/LDT for tankers and USD 460/LDT for bulk carriers, rising 2.17%.
- Turkey: USD 285/LDT for container ships, USD 275/LDT for tankers and USD 265/LDT for bulk carriers, unchanged during the week.
Steel Scrap Prices Edge Higher
Prices for HMS 1&2 (80:20) and shredded scrap recorded modest increases across major recycling markets.
Pakistan reported the strongest weekly gain, with HMS prices reaching USD 390 per tonne and shredded scrap at USD 395 per tonne. India and Bangladesh both recorded HMS prices of USD 385 per tonne and shredded scrap at USD 395 per tonne, while Turkey’s HMS prices stood at USD 375 per tonne.
Crude Oil and Currency Movements
Energy markets strengthened during the week, with Brent crude oil rising from USD 84.48 to USD 97.46 per barrel, while WTI crude climbed from USD 79.49 to USD 89.43 per barrel.
Currency movements remained relatively stable. The US dollar strengthened slightly against the Indian rupee to 96.50 from 96.35. The Bangladeshi taka appreciated marginally, while the Pakistani rupee also strengthened modestly. The Turkish lira weakened slightly against the US dollar.
Vessels Sold for Recycling
Among the notable transactions reported during the week, the chemical tanker Stolt Kikyo (3,305 LDT) was sold for delivery at Alang, India, at USD 455/LDT. The vessel was restricted to select green recycling facilities.
Other sales included the Hai Heng tanker (4,005 LDT), sold to Chittagong, Bangladesh, for USD 495/LDT, while the container vessel ISA Star (3,358 LDT) was also delivered to Chittagong at USD 480/LDT. Several additional vessels, including Tai Shuen and the woodchip carrier Thanh Thanh Dat 9999, were reported sold, although their sale prices were not disclosed.
Overall, the global ship recycling market remains divided, with Bangladesh and Pakistan benefiting from stronger buying appetite, while India’s market continues to struggle against weak domestic steel demand despite encouraging regulatory developments regarding EU recognition of additional recycling facilities.
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