Ship Recycling: Market activity levels continuing to be muted: STAR ASIA

Alang

The Indian ship recycling market remains in a holding pattern, with activity levels continuing to be muted as the fiscal year-end approaches. Market participants are exercising caution due to financial constraints, with expectations that this subdued sentiment will persist through March.

While the recent US implementation of a 25% flat tariff on steel imports has created ripples across global markets, India’s steel industry appears relatively insulated from direct impacts, with only 2% of its finished steel exports destined for US markets. However, the indirect effects could influence the ship recycling sector, particularly through potential shifts in steel scrap availability, as US mills increase domestic production and reduce scrap exports. This is especially significant for India, which sources approximately 14-15% of its scrap requirements from the US, potentially necessitating a diversification of supply sources to maintain operational stability.

Alang Anchorage & Beaching Position (FEBRUARY 2025)

Chattogram, Bangladesh

It was another quiet week in the Bangladesh sector with a similar outlook as last and likely would remain so as Ramadan approaches next week. Recently at a workshop in Dhaka, environment Adviser Syeda Rizwana Hasan led urgent calls for reform of regulatory frameworks. Hasan highlighted that workers remain largely unaware of the toxic risks they face in yards that frequently lack environmental clearance, starkly contrasting the regulated standards in Bangladesh’s garment sector.

The situation is particularly concerning as many ships arriving for breaking come from European companies who change vessel registration to small island states to evade responsibility, highlighting a troubling double standard in global maritime regulations. Hasan emphasizes the critical need to enforce existing High Court directives and hold polluters accountable through a comprehensive legal framework that aligns with international safety and environmental standards.

Anchorage & Beaching Position (FEBRUARY 2025)

Gadani, Pakistan

Markets in Gadani have shown no change over recent weeks, with no new developments to report. As Ramadan approaches, industry observers expect activity to remain stagnant, suggesting that conditions are unlikely to improve in the near term.

Anchorage & Beaching Position (FEBRUARY 2025)

Aliaga, Turkey

Another tepid week in Turkey’s recycling market with not much activity to boot.

Recent geopolitical developments, particularly the impact of Trump’s tariffs on the Turkish economy, have amplified the market’s challenges. The Turkish Lira has declined against the U.S. Dollar, settling at TRY 36.31. Steel sales remain weak, prompting mills to approach scrap purchases cautiously while exploring alternative options like imported billet to protect their margins.

Sub-Continent and Turkey ferrous scrap markets insight

The sub-continent imported scrap market continued its subdued pace this week, weighed down by weak domestic steel demand, currency fluctuations, and a slowdown ahead of Ramadan.

India:

India’s market remains muted as ample domestic scrap supplies and sluggish steel sales have kept buyers on the sidelines. Offers for shredded scrap from the UK and Europe were quoted at US$375–380 /ton CFR Nhava Sheva, while bids lagged slightly at US$370–375 /ton. Similarly, HMS (80:20) sourced from West Africa and Europe traded at lower levels, around US$345–355 /ton CFR. Despite sellers holding firm, buyers’ calls for

price cuts reflect a bearish outlook, with market participants anticipating little movement unless global price corrections or a pickup in local steel demand occur. Some traders expect activity to potentially shift after March, as changes in US tariffs could reshape global trade flows.

Pakistan:

In Pakistan, the scrap market remained sluggish with mills largely waiting for clearer signals as Ramadan approaches. Shredded scrap from the UK and Europe was offered at US$385–390 /ton CFR Qasim, but bids were slightly lower at US$378–382 /ton, leading to minimal trade. Weak liquidity and delayed government payments have compounded domestic steel sales challenges, prompting a cautious “wait-and-see” approach among local buyers. One market insider noted that while offers reached up to US$392 /ton, most deals were concluded at the lower range of US$380–385 /ton CFR.

Bangladesh:

Bangladesh saw limited activity in its scrap imports as sufficient mill inventories and a slowdown in domestic steel demand left little incentive for new purchases. With Ramadan on the horizon, local traders are adopting a cautious stance. Offers for Hong Kong PNS were maintained at US$385–390 /ton CFR, while Brazilian HMS (80:20) hovered around US$365 /ton CFR. A handful of containerised trades were reported for Singapore- origin PNS at US$382–385 /ton CFR, but overall market sentiment remains tepid due to the absence of new infrastructure projects and constrained liquidity.

Turkey:

Over in Turkey, the scrap market experienced slight price declines amid weak finished steel demand and competitive billet prices. Turkish mills, eager to reduce costs, pushed for lower scrap prices, though sellers largely held their ground. A recent deal for Baltic- origin HMS (80:20) was struck at US$358 /ton CFR, setting the tone for the week. Despite steady demand, the overall market sentiment remains cautious, with local mills favouring European and Baltic cargoes over more expensive US shipments. One trader remarked on a noticeable drop in activity, with deep-sea cargo bookings falling from 11 earlier in February to just six in the past two weeks.

This week’s report underscores the persistent challenges across the region, with domestic oversupply, economic uncertainties, and global tariff shifts continuing to shape market dynamics.