Ship Recycling: Mixed Signals were seen: STAR ASIA
Alang, India
The market remains similar in India this week as last with the year-end lull.
In the steel sector, mixed signals were seen this week. Secondary rebar prices recovered from a three-week decline, primarily driven by optimistic market sentiment following reports of a potential 25% safeguard duty on steel imports.
While end-user demand remains stable and inventory levels are sufficient, traders remain sceptical about the sustainability of the price increase in the secondary market, noting that the proposed safeguard measures would mainly affect flat steel rather than long products. The market’s future trajectory remains uncertain, with secondary market prices dependent on sentiment-driven factors and primary rebar values continuing to face downward pressure amid active distributor price negotiations.
Chattogram, Bangladesh
Recent developments in Bangladesh’s ship recycling sector highlight the government’s ongoing commitment to industry modernisation. According to a new circular from the Ministry of Industries, the government has extended the timeline for ship recycling yards to obtain their No Objection Certificates (NOC) and achieve compliance with international standards until January 26, 2024.
This extension particularly impacts facilities that have not yet completed their Ship Recycling Facility Plan (SRFP) approved development work. The Ministry’s decision reflects a balanced approach between maintaining Bangladesh’s position as a global leader in ship recycling and ensuring sustainable practices across the industry. The extended deadline provides yards additional time to implement necessary upgrades and align with international best practices.
The circular outlines that all facilities must secure their NOC documentation and transition to becoming fully compliant yards by the specified deadline.
Bangladesh’s ship recycling industry has long been a crucial player in the global maritime sector. This latest regulatory update represents a significant step toward creating a more sustainable and environmentally conscious industry.
The ship recycling markets have shown signs of improvement with gradual price rises. The recent sales are a classic example of the strength in the markets.
Gadani, Pakistan
The market has remained on the sidelines, with no significant activity, progress, or sales observed. This prolonged lull highlights the lack of momentum or development across sectors, reflecting continued challenges.
Demand in the market remains steady; however, recyclers have been sidelined due to intense competition and a significant price differential compared to neighbouring markets. This disparity continues to deter activity, leaving recyclers struggling to secure opportunities despite the persistent demand.
Aliaga, Turkey
Turkish steel mills have reduced their domestic purchasing prices this week, reflecting persistent market pessimism and weak steel sales. Market activity remains subdued.
The Turkish steel market appears to be in a holding pattern, awaiting stability in scrap prices as the continuing price decline has effectively halted steel transactions. Industry participants suggest that market recovery hinges on scrap price stabilization. Some mills may consider raising purchase prices or keeping lower-priced transactions private to stimulate steel sales.
Several factors support potential scrap price recovery, including Turkey’s outstanding January shipment requirements, reduced scrap availability due to winter conditions, upcoming holidays, and stable dock prices. Market sentiment is also buoyed by anticipated stimulus announcements from China. However, abundant supply offerings, including some for December shipment, may temper any sharp price increases.
Turkish shipbreaking scrap prices have also declined to US$340/ton delivered compared to last week. The Turkish lira closed at TRY 34.75 against the dollar on Wednesday.
Sub-Continent and Turkey ferrous scrap markets insight
This week, Sub-Continent and Turkey ferrous scrap markets remained under pressure, driven by weak steel demand, high inventories, and cautious sentiment. Key markets, including Türkiye, India, and Pakistan, recorded price declines, while activity in Bangladesh and Vietnam was limited. Factors such as low rebar sales, financial challenges, and uncertainty over import duties continued to weigh on market dynamics, resulting in minimal trade across regions.
India’s imported scrap market mirrored the global slowdown, reflecting weak steel demand and competitive domestic scrap prices. Shredded scrap offers from the US and UK/Europe dropped to US$378/ton CFR from US$383/ton, while HMS prices slipped to US$357/ton, down 1% w-o-w. The availability of cheaper domestic scrap and uncertainty over potential steel import duties compounded market caution. Minimal transactions, including 11,000-12,000 t of scrap bookings, underscored the sluggish activity.
Pakistan’s imported scrap market remained muted, with prices falling 1% w-o-w to US$380/ton from US$385/ton. Weak construction demand and financial constraints dampened buyer interest, even as suppliers held firm. Despite limited transactions,
approximately 1,000-2,000 t of scrap was booked, including UK/Europe shredded scrap at US$380-382/ton CFR.
Bangladesh’s scrap market faced a 2% price drop w-o-w, with offers for EU/UK shredded scrap at US$385-390/ton CFR Chattogram. Buyers, anticipating further declines, remained hesitant. Domestic liquidity challenges and poor rebar sales continued to weaken demand, with local scrap prices holding steady at BDT 49,000-51,000/t. Market participants remained cautious, hoping for improvement by year-end.
Across regions, a combination of economic uncertainties and muted steel demand suggests continued stagnation in the global scrap market. The Sub-Continent
Turkey’s imported scrap market experienced a further decline, with prices for bulk HMS (80:20) falling to US$338/ton, down 1% week-on-week (w-o-w) from US$340/ton—a two-year low. Despite stable offers for US-origin scrap, buyers pushed for lower prices, while sellers resisted, holding out for potential recovery. Weak steel demand, particularly in rebar, and ample supply kept sentiment subdued. Supply tightness in Europe failed to stimulate significant demand. By the weekend, the market turned quiet, with both buyers and sellers adopting a wait-and-see approach.
