Ship Recycling: Indian Market remained Quite: STAR ASIA
It’s been a quiet week for the ship recycling market in the Sub-Continent, as industry players await clarity on potential policy shifts once Trump assumes office in 10 days. The focus remains on how changes in the steel industry and commodities markets may impact global dynamics. Speculation about adjustments to U.S. steel tariffs under the new administration has already created uncertainty, with ripple effects anticipated across supply chains.
Ship recyclers, heavily reliant on stable steel demand and pricing, are closely monitoring developments as they brace for potential disruptions or opportunities stemming from the evolving geopolitical and economic landscape.
As Donald Trump prepares for his inauguration as the 47th President of the United States, the future of the US steel industry remains uncertain, particularly in regard to tariffs and trade policy. President Trump is expected to focus on the long-term sustainability of the domestic steel sector, with some analysts speculating that he may not introduce additional tariffs or quotas beyond those established under Section 232 during his first term in 2018.
The Section 232 tariffs, aimed at protecting US steel from foreign competition, were implemented shortly after the International Trade Commission filed Anti-Dumping and Countervailing duties against several countries. These tariffs have had an immediate and significant impact on the pricing and availability of key steel products, including hot-rolled, Cold Rolled, and Corrosion-Resistant steel varieties like Galvanized and Galvalume.
While there is no clarity on which countries could be subject to new tariffs under the incoming administration, the mere possibility of further trade restrictions has already caused a noticeable slowdown in offshore steel orders. Early license data suggests a substantial drop in steel imports for the first half of 2025, though the full consequences of these changes have yet to materialise.
In a related development, Trump appears to back the Biden administration’s decision to block the Japanese acquisition of U.S. Steel by Nippon Steel. If U.S. Steel follows through on its earlier threats of retaliation, it could lead to the idling of key steel production facilities in the Midwest, exacerbating supply issues for Flat-Rolled steel products.
Steel prices have remained under pressure, with prices down 37.5% from the same time last year. Leading US steelmakers have indicated the need for price hikes, but uncertainty about future demand continues to keep buyers cautious. Spot prices remain significantly lower than published mill prices, and many are reluctant to make significant purchases until demand patterns become clearer.
Despite weak backlogs and slow consumption from major manufacturing sectors, some industry observers wonder if price increases could gain momentum regardless of demand. As it stands, the US steel market remains in a state of flux, and whether President Trump will provide the clarity needed for a decisive shift in market conditions remains to be seen.
The ship recycling market is experiencing a consistent flow of end-of-life vessels, with sales reported steadily at current market rates. Industry experts predict a significant surge in supply after the Lunar New Year, as numerous ageing vessels owned by Chinese shipowners are being tested for the time being —a strong indication that a significant supply of ships is on the horizon.
Alang, India
The domestic ship recycling market remained quiet and steady this week, with prices holding firm at the prevailing levels. However, concerns are mounting among recyclers as the strengthening US dollar puts pressure on margins.
The Indian rupee has depreciated to ₹86.20 ~ 86.30 against the US dollar, marking about 2% decline in less than a month. This sudden shift disrupted two years of relative stability, during which the currency experienced only moderate fluctuations. Market participants are closely monitoring currency movements as they brace for potential impacts on the sector’s profitability.
Some sales were recorded for Alang, but markets have overall been quiet with not much activity to report on.
On the other hand, India’s imported scrap market has experienced a modest decline this week, with offers from EU, UK, and US sellers dropping by US$5-10/ton from December levels as they return from the New Year holidays.
While rebar demand has shown positive signs since January, driven by government projects and housing sector inquiries, domestic scrap supplies remain sufficient for current needs. The situation is further complicated in the northern region, a key scrap-consuming area, where working capital constraints and weather-related operational disruptions are affecting market dynamics. Industry insiders suggest that import demand is unlikely to strengthen until the currency stabilizes or scrap prices decrease by US$15-20/ton.
Chattogram, Bangladesh
The ship recycling market saw limited activity this week as recyclers assessed the impact of a sudden surge in the US dollar against the Bangladeshi Taka. Over the past few
weeks, the Taka has weakened significantly—by approximately 5%—placing additional strain on market dynamics.
The issue of opening Letters of Credit has re-emerged as a critical concern, with local banks tightening foreign exchange releases in response to prevailing domestic economic challenges.
While on the other hand, domestic ship scrap prices remained largely stable. Prices for melting steel, in particular, experienced a modest increase, attributed to a shortage of imported materials. However, this uptick has not been sufficient to invigorate market activity.
Overall, market conditions remain relatively unchanged from the previous week, with most ship recyclers opting for a “wait-and-see” strategy or submitting lower price offers. The sector continues to grapple with external economic pressures and a subdued demand environment.
In a significant development, the interim government has announced deadline extensions for six reform commissions, tasked with drafting proposals on key governance areas, including the constitution, police, judiciary, elections, public administration, and anti-corruption. According to a Cabinet Division notice, five commissions now have until January 15 to submit their recommendations, while the Judiciary Reform Commission has been granted an extended deadline of January 31. The extensions are expected to provide additional time for thorough deliberations on these critical reforms which would shape up the underlying economic conditions and the outcome of such would affect the industries which have been struggling to get the clue.
Gadani, Pakistan
Extremely quiet week in the Pakistani markets with no new record of activity. Levels remain stagnant from the end of the year, and the new year has yet to spark any new sales.
On the economic front, the State Bank of Pakistan reported on Thursday that its foreign exchange reserves decreased by US$15 million to US$11.69 billion, marking the third consecutive week of decline. The country’s total foreign exchange reserves stood at US$16.3 billion, with commercial banks holding US$4.6 billion of this amount.
Anchorage & Beaching Position (JANUARY 2025)
Aliaga, Turkey
The Turkish scrap market has resumed activity after the year-end break but with a notably cautious approach from Turkish mills. The overall market sentiment has weakened considerably at the start of the new year, influenced by unfavourable news from China and declining ASEAN and Chinese billet prices.
Turkish mills are facing challenges in both domestic and export steel markets, leading to reduced rebar offers and billet prices. This situation, combined with the euro’s recent volatility and concerns about material quality from certain regions, has created a complex trading environment where mills are increasingly resistant to higher scrap prices, with some suggesting levels should fall below US$330/tonne cfr.
Sub-Continent and Turkey ferrous scrap markets insight
The Sub-Continent Scrap Market Weekly Overview: Weak Demand and Volatile Prices Define the Week. The imported scrap markets across the Sub-Continent experienced a cautious tone this week, as weak buying interest and fluctuating price dynamics kept activity subdued.
Economic pressures, currency challenges, and post-holiday caution shaped a restrained trading environment in India, Pakistan, Bangladesh, and Turkey.
India: Domestic Scrap Gains Favor Amid High Seaborne Costs
India’s imported scrap market remained muted, with buyers shifting towards domestic procurement due to elevated seaborne offers and a weakening rupee, which pushed up import costs. UK-origin shredded scrap prices held steady at US$383/ton CFR Nhava Sheva, while offers were at US$385/ton CFR. However, bids fell below US$380/ton CFR, creating a pricing gap.
HMS (80:20) from the UK and Europe was quoted at US$355-360/ton CFR, with West African HMS at US$360-370/ton CFR. Minimal deal activity was reported as traders cited a US$10/ton gap driven by currency fluctuations. Despite steady domestic billet and TMT production, oversupply and cautious sentiment dampened demand for imported scrap, with expectations of sluggish market conditions persisting.
Pakistan: Subdued Trading Amid Reduced Mill Capacity
Pakistan’s scrap market saw limited activity, with mills operating at reduced capacity (around 45-50%) amid weak demand. UK-origin shredded was assessed at US$388/ton CFR Qasim, down by US$2/ton compared to the previous day. Offers remained at US$388-390/ton CFR, but bids were below workable levels.
UAE-origin HMS traded at US$368-370/ton CFR, with shredded offers reaching US$392- 395/ton CFR. Seasonal scrap shortages provided marginal support, but weak finished steel sales led to discounts. While traders anticipate a potential price increase to US$392-396/ton CFR in the short term, broader recovery signals remain absent.
Bangladesh: Cautious Optimism as LC Openings Improve
Bangladesh’s scrap market showed steady booking activity, with 15,000-16,000 t secured recently. However, prices are expected to stay range-bound amid cautious sentiment.
UK-origin shredded was unchanged at US$391/ton CFR Chattogram.
Traders highlighted that LC openings have slightly improved but remain infrequent. Dhaka-based buyers remained active, while Chattogram-based buyers quoted below current offers.
Bulk US-origin prices included HMS at US$370/ton CFR, shredded at US$375/ton CFR, and bonus at US$380/ton CFR. Sellers remained firm, but buyers resisted offers exceeding US$360/ton CFR, as major mills held sufficient inventory, and some refrained from fresh purchases.
Turkey: Price Pressures Persist Amid Ample Supply
Turkey imported scrap market saw further softening, with US-origin HMS (80:20) assessed at US$343/ton CFR, unchanged from the previous day. European and US-origin deals were confirmed at lower levels, reflecting strong recycler availability.
Mills pushed for additional price reductions, with bids for US scrap at US$339-342/ton CFR and EU material at US$330-335/ton CFR. Sellers resisted sharp declines, but buyers anticipated concessions amid an oversupplied market.
While short-term sentiment remains bearish, some recyclers foresee tightening supply later in the year, potentially stabilising prices in the long term.
