Ship Recycling: Indian market condition remained strong: BEST OASIS

Ship Recycling: Indian market condition remained strong: BEST OASIS

Leading cash buyer of ships sending for recycling, BEST OASIS in their weekly ship recycling market report opined that, this week, the ship recycling industry across four major destinations showed varying trends. In India, market conditions remained strong with increasing booking prices and robust steel demand. Bangladesh saw a marginal increase in interest from recyclers, possibly due to anticipated duty adjustments in the upcoming budget. In Pakistan, although the market was stable, recent policy changes regarding tax exemptions are expected to impact market dynamics. Türkiye’s market also remained stable but noted an increase in tonnage supply, indicating potential future shifts. 

The World Economic Situation and Prospects report released by the Department of Economic and Social Affairs of the United Nations predicts global economic growth of 2.7% in 2024 and 2.8% in 2025, a slight increase from earlier forecasts. Although major economies have managed to reduce inflation without escalating unemployment, challenges such as high interest rates, geopolitical tensions, and climate risks remain significant. Growth prospects have improved for the U.S., Brazil, India, and Russia, while they have declined for Africa. 

Global steel demand is on the rise with steel prices already increasing for May and June, further bolstered by the US raising Section 301 tariffs on Chinese steel and aluminium imports. This is reflected in the global purchasing managers’ index moving into a growth zone. Concurrently, global iron ore exports for the first quarter of 2024 grew by 6% year-over-year to 376 million tons. The largest contributions came from Australia, Brazil, South Africa, India, and Canada, with Brazil and India showing notable increases of 12% and 33%, respectively. 

INDIA

The market shows steady growth and strong demand ahead of the expected seasonal downturn.

The market conditions remain consistent with the previous week, continuing to exhibit strong performance. Booking prices have also shown an upward trend, reflecting robust demand. 

Local demand is maintaining its strength, closely aligned with the ongoing robust demand for steel, which is propelling market momentum. 

We anticipate that the market will remain favorable throughout May. However, we expect a downturn during the upcoming monsoon season, as is typical for this period. 

The United Nations has revised its earlier economic projections for India, forecasting growth rates of 6.9% in 2024 and 6.6% in 2025. The anticipated growth is primarily driven by robust public investment and solid private consumption. 

Beaching Dates 

21 May to 29 May 2024

03 June to 11 June 2024

19 June to 28 June 2024 

BANGLADESH

Recyclers show cautious interest ahead of anticipated duty adjustments in the upcoming June budget. 

This week we have seen a little interest from the recyclers front and the reason for the same can be the upcoming budget which is expected to be released in the first week of June around June 6 and it is expected to have some corrections of duties. 

Bangladesh’s foreign exchange reserves have recently declined, falling below the critical threshold of 13 billion USD in usable funds due to recent payments for import liabilities to the Asian Clearing Union (ACU). Official sources from Bangladesh Bank reveal that while the total reserves currently amount to 23.77 billion USD, the accessible funds are now just under 13 billion USD. This decrease underscores a pressing need for strategic financial management to mitigate further economic strain. 

Beaching Dates 

22 May to 25 May 2024

05 June to 08 June 2024

22 June to 25 June 2024 

PAKISTAN

Despite the ongoing slowdown, glimmers of hope appear in the horizon for future market dynamics. 

Although the market conditions remain unchanged from last week, the recent announcement regarding the removal of tax exemptions is expected to significantly alter market dynamics soon. 

The Finance Minister of Pakistan has announced the removal of tax exemptions for industries in the previously autonomous regions of FATA (Federally Administered Tribal Areas) and PATA (Provincially Administered Tribal Areas). This includes the steel industry, which previously enjoyed an 18% exemption on sales tax for products like wire rods. This exemption allowed cheaper, tax-free goods to flood the market,  adversely affecting local mills. With the withdrawal of these tax benefits, it is hoped that the market conditions will stabilize, providing relief to local industries. 

Pakistan has extended the imposition of a 19.15% ad valorem anti-dumping duty on Chinese steel rebars for an additional five years, which was effective from October 17, 2022. This decision by the National Tariff Commission aims to protect the local steel industry from underpriced imports. 

Beaching Dates 

Throughout the month

TURKEY

Market stability holds as tonnage supply experiences a modest Uptick. 

Market stability persists, with no notable changes reported since the previous week. Although the market remains stable, there has been a recent increase in the supply of tonnages. 

Türkiye’s foreign exchange reserves increased significantly, rising by 9.8 billion USD last week. According to the Central Bank of the Republic of Türkiye (CBRT), the net international reserves stood at 30.87 billion USD as of May 10. This marks a substantial growth, totalling $16.86 billion in gains over the past two weeks. 

Beaching Dates Throughout the month