Ship Recycling : India experienced significant fluctuations
World’s leading cash buyers for ships for demolition BEST OASIS explained in their weekly ship recycling report.
The United Arab Emirates (UAE) has recently introduced a comprehensive set of regulations about ship recycling. These regulations explicitly prohibit the use of “beaching” and “landing” methods, which are commonly employed by ship recyclers in the Indian subcontinent and Turkey. Additionally, the UAE prohibits the utilization of its waters as a temporary layover for vessels en route to demolition sites on the shores. At present, this regulation is being implemented at the time when numerous Indian subcontinent ship recycling yards which have already obtained Hong Kong Convention (HKC) certification and have made significant investments in their infrastructure with the intent of being included in the European Union (EU) list, are affected by this regulation. This appears to be a major blow for such establishments, as it will have a substantial impact on the forward momentum of this industry.
Throughout this week, the ship recycling sector in India experienced significant fluctuations, characterized by intermittent increases followed by subsequent declines. Overall, the sentiment remained primarily low. Additionally, the local steel market in India has been grappling with a notable reduction in demand. In Bangladesh, the market has experienced a lack of activity and a slowdown, resulting in no sales and significant challenges related to LC. Similarly, Pakistan is also struggling with LC issues, which can be attributed to the ongoing economic difficulties the country has been facing. In contrast to previous weeks, Turkiye’s performance has exhibited stability in the current week, without any significant improvements.
The International Energy Agency (IEA) indicated that global oil demand is projected to increase at a faster rate than previously anticipated in the coming year. This indicates that the short-term prospects for oil consumption remain strong. The IEA has stated in its monthly report that global consumption is projected to increase by 1.1 million barrels per day (bpd) in 2024. This is an upward revision of 130,000 bpd from the previous forecast, attributed to a more positive outlook for the United States and a decrease in oil prices.
The market observed fluctuations, mostly characterized by a downward trend. Throughout this week, the market has experienced fluctuations, characterized by intermittent periods of surges followed by subsequent declines. As of now, the market is currently experiencing a low point.
The local steel market is experiencing a lack of demand, and overall demand is very low. With China’s export bids at 10–20% below market pricing, India’s steel mills have once again refrained from making offers, except the European Union, for the last three months. Before starting to export again to Southeast Asia and the Middle East, the market is keeping a careful eye on world trends.
The Ministry of Steel convened a meeting to assess the import situation in the nation. Steel manufacturers have informed the ministry that imports from countries such as China and Vietnam have increased steadily. They have also proposed several measures, including the elimination of certain duty cuts and the implementation of a tariff rate quota that establishes predetermined limits for duty-free shipments entering India.
15 December to 19 December 2023
The current market conditions indicate a slump characterized by a lack of sales and persistent issues with LC.
The market conditions have continued to be challenging, with no sales activity being observed in this area. The region is now experiencing substantial LC issues that have hampered activities in this area, as we have repeatedly and continually outlined. The IMF has stated that Bangladesh should implement stricter monetary policies and adopt a more flexible exchange rate system to effectively control high inflation. This recommendation comes as the IMF board has approved the disbursement of $689 million as the second installment of the $4.7 billion loan package designated for Bangladesh.
15 December 2023
26 December to 29 December 2023
There were no notable changes observed in the market during the course of this week. This week has also been quiet mirroring the tranquility observed in the previous week.
This market is currently experiencing issues related to LC. There are a limited number of individuals who possess LC facilities.
The price of steel, a crucial material in the construction industry, has experienced a decrease in Pakistan due to the strengthening of the rupee against the US dollar since September 2023. The price decreased by 60,000 PKR per tonne.
The stock exchange is currently experiencing a peak level, which may create a misleading perception that the economy is thriving when it is quite the opposite.
Throughout the month
The market maintained its stability and showed no additional signs of improvement. The market has exhibited stability throughout the current week, with no notable advancements observed in either the import or local market.
The Turkish lira has depreciated by 35% so far this year and has reached a new all-time low of 29 per dollar, following a relaxation of currency controls by authorities as part of a shift toward more conventional policies.
At present, Turkey’s inflation issues remain unresolved despite a significant shift in economic policies; consumers assert that the proposed minimum wage increase will merely provide temporary respite for financially constrained households.
Beaching Dates Throughout the month