Ship Recycling : India’s market continued to show sluggishness : Best Oasis

Ship Recycling : India’s market continued to show sluggishness : Best Oasis

BEST OASIS is Word’s leading cash buyers for ship to be sent for recycling, in their weekly market report Best Oasis opined that : Exploring the ship recycling destinations for this week. India’s market continued to show sluggishness, similar to the previous week, with a lack of demand for scrap and vessels. The future of this market remains uncertain, and only time will reveal how it will fare. Meanwhile, Bangladesh’s situation remains unchanged and soft, with no signs of improvement in the next few days.

It is only hoped that the issue of LC will be resolved in the coming month. Pakistan’s current market situation is similar to that of the previous week, however, there is a sense of optimism in the economy following the approval of the financial assistance tranche by the IMF. The one particularly encouraging development is from Turkiye, which has seen growth in both the local market and imports.

Furthermore, there is a notable demand from buyers in this region for vessels of certain sizes, owing to a scarcity of available tonnage. The World Bank forecasts that the global economy will have its slowest five-year growth period in thirty years. According to the organization’s most recent “Global Economic Prospects” report, global growth is expected to drop in 2024 for the third consecutive year, falling to 2.4% from 2.6% in 2023. Subsequent to that, there is an anticipation of a little increase in growth to 2.7% in 2025. However, the rate of growth throughout these five years will still be around0.75% lower than the average rate seen in the 2010s.

The organization said that while the global economy remained strong in the face of recessionary concerns in 2023, rising geopolitical tensions would introduce new hurdles in the near future. As a result, most countries are expected to have slower growth in 2024 and 2025 compared to the previous decade. Crude oil prices saw a significant increase after the initiation of attacks by the U.S. and U.K. on military equipment used by Houthi rebels in Yemen. This development has raised fears about the escalation of a conflict in the Middle East, which may potentially cause more disruptions to commercial shipping in the Red Sea.

INDIA

The market remains in a state of decline, with an uncertain trajectory ahead. The market is currently experiencing a slump, resulting in a lack of demand for scrap and vessels. At present, the future trajectory of this market is uncertain. Initial anticipations of a market recovery have not been met, leaving the outlook uncertain. As mentioned in our previous reports, the steel industry anticipates that the government will include a mechanism in the forthcoming interim budget to address the issue of cheap imports. 

Currently, the steel ministry has not submitted a request to the finance ministry for the implementation of increased tariffs owing to strong domestic demand. The disparity between imports and exports is significantly increasing. 

Beaching Dates 

12 January to 17 January 2024

23 January to 30 January 2024

08 February to 15 February 2024 

BANGLADESH

The market is fatigued, and this trend will continue over the coming few days. 

The elections have concluded, however, the market remains sluggish and is expected to continue in this state for the next 10-20 days. There is currently a dearth of demand for local inventory and a lack of interest from recyclers as well. The increasing need for foreign currency, particularly USD, is apparent. If buyers get support from the bank to open their LCs in the new year, it might become somewhat more favorable. 

The Bangladesh Bank (Central Bank) is collecting US dollars from other banks to fulfill the International Monetary Fund’s year-end foreign exchange reserve obligations, as a component of the 4.7 USD billion loan package. 

Beaching Dates 

13 January to 16 January 2024

28 January to 30 January 2024

11 February to 14 February 2024 

PAKISTAN

The market stands unchanged from the previous week; however, optimism may be approaching in light of IMF reimbursement.

The market here reflects the situation of the previous week and remains unchanged. Steel bar manufacturers have raised prices by 4,000 PKR per tonne, attributing it to a strong upward trend in the global iron and steel scrap markets. Also, the increase in scrap prices in global markets is partly due to a shortage of steel scrap collection during the winter season, resulting in a price surge of 20-25 USD per tonne. 

The IMF’s executive board approved an immediate transfer of around 700 million USD for Pakistan. The funds were released when the board authorized the first review of a nine-month, 3 billion USD loan agreement signed in July 2023. 

Beaching Dates 

Throughout the month

TURKIYE

This week observed a notable rise in both the local and import market. 

The local market has seen a significant improvement of 6 USD, while the import market has also experienced a notable increase of 4 USD. 

Buyers are showing strong interest in vessels that have a capacity of over 5,000 LWT due to the limited supply. Turkey’s inflation rate remained persistently high despite the economic recovery.  

According to government analysts and market observers, this cycle could peak around 70% by the middle of 2024 before falling to about 40% by the end of the year. 

Beaching Dates Throughout the month