Ship Recycling: Demand in Alang remained low: BEST OASIS

Ship Recycling: Demand in Alang remained low: BEST OASIS

World’s leading cash buyers for ships for recycling, BEST OASIS in their weekly report opined that The ship recycling sectors across India, Bangladesh, Pakistan, and Turkiye are experiencing varying degrees of market stagnation and operational challenges. In Alang, India, the market remains stagnant with a continuous low demand for scrap vessels, a trend that has persisted over recent weeks. Bangladesh’s market is facing a decline, leading buyers to adopt a cautious wait-and-see approach. This cautiousness is further compounded by a non-supportive banking sector, influenced by a dollar liquidity crisis, which has led to selective approval of LCs and challenges in vessel acquisition due to banks’ delayed approval processes. In Pakistan, market conditions have not seen any shifts, maintaining the status quo from the previous week. However, the unclear election results and the resulting government formation uncertainty are causing market unrest, with expectations for clarification in the coming days. Türkiye’s market has held steady at the levels observed in the previous week, albeit with a notable decrease of 4 USD in imports, indicating a slight shift in market dynamics. 

BIMCO, in collaboration with national representatives from Bangladesh, India, Norway, Pakistan, and the International Chamber of Shipping, has formally submitted a paper emphasizing the critical need to address potential conflicts between the Hong Kong Convention and the Basel Convention. This submission, aimed at the upcoming 81st session of the Marine Environment Protection Committee (MEPC) scheduled for March 18-22, 2024, seeks to preemptively mitigate adverse implications for shipowners, recycling facilities, and maritime vessels, thereby ensuring regulatory harmony and operational efficiency within the international shipping industry.

INDIA

Market stagnation continues with ongoing low demand for scrap vessels. Market conditions remain stagnant with persistently low demand for scrap vessels, mirroring the situation of the past few weeks. Elevated coal prices may impede the debt reduction strategies of Indian steel manufacturers, potentially leading to a weakening of sector leverage to levels observed in 2021, should input costs persist at their current rates. 

Indian steel producers confront notable risks from the EU’s carbon tax on imports, juxtaposed with Australia’s $100 billion initiative to become a green energy superpower, highlighting a pivotal shift that poses both challenges and opportunities for the two countries. 

Beaching Dates 

23 February to 27 February 2024

08 March to 15 March 2024

26 March to 30 March 2024 

BANGLADESH

Local market slump and banking challenges intensify amid dollar liquidity crisis. The decline in the local market leads to a cautious approach among buyers, prompting a wait-and-see strategy. 

The banking sector’s non-supportive stance was exacerbated by the dollar liquidity crisis, resulting in the selective approval of LCs. Challenges in vessel acquisition due to banks’ delayed approval process; frequently, vessels are sold before receiving final bank approval. 

These trends are becoming increasingly common in the current market environment. Bangladesh Bank introduces Taka-Dollar exchange facility to enhance financial flexibility of commercial banks. This strategic initiative aims to support banking sector operations and improve foreign exchange management. The new facility is designed to streamline currency transactions and mitigate exchange rate volatility. 

Beaching Dates 

26 February to 29 February 2024 

11 March to14 March 2024 

25 March to 28 March 2024 

PAKISTAN

Markets stagnate amid election confusion; Pakistan steel industry seeks growth boost, forex reserves slightly up. 

There have been no shifts in the markets, and they have remained unchanged from the previous week. 

The election results lack clarity regarding the formation of the government. Extreme uncertainty tends to unsettle the markets. The position will be clarified in the coming days. 

The steel industry in Pakistan has requested the caretaker prime minister to streamline the turnover tax and implement export facilitation scheme (EFS) rules in 

Container Tanker Bulker to enhance the growth of the sector. 

The Pakistan Central Bank’s foreign exchange reserves increased by $13 million to $8.05 billion in February, according to a statement from the State Bank of Pakistan. 

Beaching Dates 

Throughout the month 

TURKIYE

The market remains the same (dull) as in the previous week and imports are falling. 

The local market has maintained its levels from the previous week, while there has been a decrease of 4 USD in imports. 

Turkish budget revealed a deficit of 150.72 billion lira ($4.9 billion) in January, with the primary deficit, excluding interest payments, totaling 29.6 billion lira, according to the Treasury and Finance Ministry. 

Turkey and Egypt have decided to strengthen their energy cooperation by exploring potential trade prospects in natural gas and liquefied natural gas (LNG). This decision was announced in a statement during a significant visit by a Turkish president to Egypt. 

Beaching Dates Throughout the month