Ship Recycling: India’s market is improving: BEST OASIS

Ship Recycling: India’s market is improving: BEST OASIS

World’s leading cash buyers for ship sending for recycling BEST OASIS in their weekly ship recycling market report opined that, “India’s market is improving”.

India’s ship recycling market is improving, driven by robust local demand anticipated to maintain favourable conditions this month. Bangladesh’s market is stable but slightly declining. Challenges include sluggish demand from steel mills and LC issues from USD shortages, while an influx of Chinese-built vessels has impacted buyer confidence. Pakistan’s market remains unchanged with no new vessel entries and persistent slow activity, though steady recycling rates persist despite diminished construction sector demand, suggesting possible future price drops. In Turkiye, steel prices are stable, yet ship recycling yards are offering higher prices for immediate vessel delivery due to strong demand. 

Oil prices have reached a two-month low, notably impacting WTI and Brent crude due to increased supply, lower demand, and negative economic indicators, signalling an extended bearish phase. Contributing factors include a surprise rise in U.S. crude inventories and persistent economic pressures such as high-interest rates, which bolster the dollar and reduce oil affordability internationally. These conditions suppress consumer spending and business investment, further curtailing oil demand. 

The Organization for Economic Co-operation and Development (OECD) has raised its global economic forecast, driven by robust growth in the United States and China. The global economy is projected to expand by 3.1% this year and 3.2% in 2025. However, recovery rates vary significantly, with weaker performance in Europe and most low-income countries, contrasted by strong growth in the U.S. and several large emerging markets.

INDIA

The market demonstrates a strong upward trajectory driven by robust local demand. 

The market has shown significant improvement and is currently on an upward trajectory. 

Trends suggest that the market conditions will remain favourable at least through the end of this month. 

This upward movement is primarily driven by robust local demand, supporting strong market performance. 

India’s steel exports to Europe reached a five-year high of 3.3 million tonnes in FY24, a 65% increase from the previous year. However, India’s market share declined in the UAE and Southeast Asia, with exports to the UAE at a five-year low. Increased competition from Chinese exports has impacted Indian steel mills’ performance in the UAE and Vietnam. 

Beaching Dates 

05 May to 13 May 2024

21 May to 29 May 2024

03 June to 11 June 2024 

BANGLADESH

The market demonstrated stability with underlying downward trends and buyer caution. 

The market remains largely stable, though it exhibits a slight downward trend contrary to expectations of a marginal rise. 

Recent transactions at higher rates in the ship recycling industry do not reflect broader market trends but were instead influenced by specific recyclers needing to increase their inventory, amidst sellers demanding notably high rates. 

There is sluggish demand from local steel mills, which is impacting overall market momentum. 

Persistent issues with LCs due to a shortage of foreign exchange reserves, specifically in USD, impacting financial transactions. 

A significant influx of Chinese-built vessels in the market. Lower confidence among buyers towards Chinese-built vessels, affecting purchasing decisions. 

Beaching Dates 

07 May to 10 May 2024 

22 May to 25 May 2024 

05 June to 08 June 2024 

PAKISTAN

The stagnant market faces a potential price drop amid steady rates and reduced demand. 

The market has remained unchanged from previous weeks, with activity continuing at a very slow pace. There have been no new vessels entering the market, contributing to the stagnant conditions. 

Given the current trends, there is an expectation that prices might decrease shortly. 

Despite these challenges, the recycling rates have remained steady, as there have been no significant shifts in currency value or overall demand. A contributing factor to the market’s sluggishness is reduced demand, particularly from the construction sector, which has impacted the industry’s momentum. 

Beaching Dates 

Throughout the month 

TURKIYE

Stable steel prices and higher offers for prompt delivery sustain favourable market conditions. 

Steel prices are currently stable; however, there has been a noticeable trend where ship recycling yards are offering higher prices for vessels available for prompt delivery. In April, Turkey’s annual inflation rate surged to 69.8%, with consumer prices rising by 3.18% from the previous month. Despite this significant increase, the inflation figure was somewhat lower than many analysts had anticipated. However, the possibility of interest rate reductions remains distant. 

Beaching Dates Throughout the month