Ship Recycling: Indian Market resumed Normal Operations: STAR ASIA
Following the festive holidays in India, markets have resumed normal operations, while Bangladesh and Pakistan have regained momentum after a dip in domestic ship scrap prices. Across the Sub-Continent, prices have stabilised, maintaining strong demand and steady market conditions.
The coming week’s Tradewinds Ship Recycling Forum in Copenhagen comes at a particularly pivotal moment for the industry as several significant developments converge. Participants will be eager to discuss India’s ambitious push for EU certification of Alang yards, and the timing is especially relevant given China’s recent announcement of recycling subsidies and India’s new inclusive shipbuilding policy.
These initiatives, combined with Bangladesh’s November 14 deadline for yards to comply with SRFP requirements, will be some of the hot topics for discussion.
Alang, India
The ship recycling markets have bounced back with positive sentiment following the Diwali holidays. Demand remains moderately strong at current price levels, with most
recyclers anticipating domestic prices will stabilise as they continue on a gradual upward trend. Overall, the markets have shown stability, supported by steady demand.
Chattogram, Bangladesh
After a period of volatility, local markets have gradually started to show signs of improvement, with domestic ship scrap prices climbing back to levels seen a month ago, reviving market sentiment.
However, this recovery has not yet been fully reflected in ship pricing, which remains below the US$500/ton mark. Looking ahead, Bangladeshi recyclers are expected to lead the sector soon.
Gadani, Pakistan
The markets have remained steady, with demand holding firm but a noticeable absence of available ships. Frustration among recyclers has been growing, yet a crucial factor keeping the industry afloat is the influx of low-cost Chinese imported finished and semi- finished steel products.
Aliaga, Turkey
The Turkish scrap market is experiencing mixed dynamics following recent geopolitical developments, particularly Donald Trump’s re-election. Import values have strengthened, however, domestic prices have seen downward adjustments. Market attention has shifted toward potential Chinese economic stimulus measures, though Trump’s victory raises longer-term concerns about China’s economic outlook.
Notably, while most emerging market currencies weakened, the Turkish lira showed resilience, appreciating against the dollar to TRY 34.25 midweek. Against this backdrop, shipbreaking scrap prices have adjusted downward to US$365-380/ton delivered.
Sub-Continent and Turkey ferrous scrap markets insight
This week, ferrous scrap markets across the Sub-Continent showed mixed trends, influenced by domestic steel demand, policy changes, and currency fluctuations. While Turkey’s market held stable but cautious, India recorded modest gains driven by domestic steel price hikes and post-holiday restocking. Pakistan and Bangladesh experienced slight price increases but remained constrained by economic and infrastructure challenges.
The imported scrap market in India showed an overall positive trend this week, with shredded scrap prices climbing US$3 per ton (1% week-over-week) to US$394/ton CFR. UK-origin HMS (80:20) rose by US$3/ton to US$370/ton CFR, while UK-origin shredded scrap prices increased by 3% week-over-week to US$397/ton CFR. Despite these gains, demand was tempered by post-Diwali recovery and bid-offer gaps, leaving many buyers cautious, particularly at higher price levels.
The uptick in domestic steel prices and signs of tightening supply bolstered primary mills’ demand for scrap, prompting larger procurement volumes and slight price increases for shredded and HMS grades. Speculation over potential price movements post-US elections further fueled urgency among buyers, pushing offers upward. Prices for HMS (80:20) from the UK, Europe, and West Africa were noted at US$370-375/ton CFR, aligning with shifting buyer needs and a more optimistic market outlook.
Pakistan’s imported scrap market experienced a modest rise, with shredded scrap prices increasing by US$7/ton week-over-week to US$396/ton CFR Qasim, up from US$389/ton the previous week. This trend was supported by a slight improvement in domestic rebar prices and positive policy developments from the State Bank of Pakistan.
Despite the upward trend, mills remained cautious due to high offers and a sluggish domestic market, with many operating below full capacity. Domestic steel sales showed stability, with rebar prices holding steady and scrap prices at PKR 148,000-150,000/ton.
Optimism from potential IMF support and increased remittances bolstered sentiment, but high inventories and tight profit margins kept demand for imported scrap subdued.
The Bangladeshi imported scrap market also saw price increases, with shredded scrap rising by US$9/ton week-over-week to US$401/ton CFR Chattogram. HMS (80:20) from the US edged up US$2/ton to US$380/ton. Despite weak steel demand and ongoing disruptions in construction, tighter supply and renewed interest from mills supported these price gains.
However, containerised scrap activity remained limited as buyers opted for smaller bulk purchases from nearby sources like Japan and Singapore. Payment issues, particularly related to letters of credit (LCs), and a significant 40-50% drop in rebar demand due to halted government infrastructure projects added further pressure. Consequently, mills maintained high scrap inventories, reducing booking activity and weighing on market sentiment.
Turkey’s imported scrap market remained stable, with US-origin HMS (80:20) holding at US$362/ton CFR. Sellers maintained cautious optimism, anticipating a price floor ahead of the domestic buying period and the US election. However, limited demand and a broad scrap-to-rebar price spread restricted price movements.Turkish mills showed limited urgency to restock, hindered by slow domestic rebar sales.
