Ship Recycling: Week opened with modest firmness in India: STAR ASIA

Ship Recycling: Week opened with modest firmness in India: STAR ASIA

Alang, India

The ship recycling sector in India opened the week with modest firmness, though initial optimism quickly faded as trading activity diminished by mid-week. While the market maintains a steady course overall, recent geopolitical tensions with Pakistan have introduced an element of uncertainty that continues to influence buyer sentiment.

Overall, recycling markets remained stable with demand intact.

Overshadowing these challenges is also the persistent liquidity crunch affecting India’s financial ecosystem. Limited fund movement constrains both traders and mill owners, ultimately dampening transaction volumes and market confidence.

Anchorage & Beaching Position (MAY 2025)

Chattogram, Bangladesh

Bangladesh continues to steer challenging waters as the industry inches toward Hong Kong Convention (HKC) compliance ahead of the June 26 enforcement deadline. While the issuance of No Objection Certificates (NOCs) has resumed, overall activity remains notably subdued, with market sentiment dampened by limited approvals and sluggish transaction volumes.

With just over 5 weeks remaining until this landmark shipping regulation takes effect, Bangladesh appears overwhelmed by the impending regulatory transition that will reshape global recycling standards. The situation is further complicated by local authorities’ cautious approach to vessel import clearances, with approvals being processed on a case-by-case basis, creating additional delays and uncertainties for potential deliveries.

Several vessels that had been waiting at the outer anchorage in Chattogram have finally received their No Objection Certificates (NOCs). However, the prolonged delay incurred significant holding costs for cash buyers and owners, rendering many of these deals financially unviable and resulting in losses.

The outlook for newly arriving tonnage remains uncertain, as the issuance of NOCs for non-HKC-compliant yards is still pending an official extension.

The higher authorities from Dhakka are meeting this Sunday,11 May at Chattogram to evaluate the situation and take a prospective call on whether to give more time to the yards to complete the upgrading and resume issuing NOC’s. Until such a directive is granted, the ability to proceed with fresh transactions remains constrained.

Anchorage & Beaching Position (May 2025)

Gadani

Pakistan continues to experience inactivity. Transaction volumes have dwindled to minimal levels as recyclers exhibit limited buying interest, and the few tentative offers that do emerge remain significantly below those seen in neighbouring markets.

This pricing disadvantage has sidelined Pakistan, with the market showing troubling signs of prolonged stagnation rather than cyclical slowdown. The ongoing political tensions also may further weigh on current market sentiment, adding to already testing economic conditions.

Anchorage & Beaching Position (MAY 2025)

Aliaga, Turkey

Market activity remains sluggish despite Turkish mills’ requirements for June-shipment cargoes, with most buyers resistant to suppliers’ price targets amid continued weakness in domestic steel sales.

No new activity to report this week.

Sub-Continent and Turkey ferrous scrap markets insights

India

India’s imported scrap market remains subdued as buyers maintain a cautious stance amid weak domestic steel demand and mounting challenges. Offers for UK/EU-origin shredded scrap hold steady at US$370-375/t CFR, but bids linger significantly lower at US$360-365/t, creating a substantial price gap that has stifled trading activity. EU HMS 80:20 material, offered at US$350-355/t CFR, faces similar resistance with deals rarely exceeding US$350-352/t. The approaching monsoon season, combined with rupee depreciation and concerning regional unrest in western and northern states, has further dampened market sentiment, with mills showing little appetite for forward bookings and preferring readily available cargoes instead.

Bangladesh

Acute liquidity constraints and seasonal demand softness continue to plague Bangladesh’s imported scrap market, where rising freight costs have further dampened already weak buying interest. Australian shredded and PNS offers stand at US$375-380/t and US$385/t CFR Chattogram respectively, but face strong buyer resistance with a striking bid-offer gap of US$57/t hampering transactions. The few deals concluded include Australian HMS 80:20 at US$355/t and Chilean HMS 90:20 at US$348/t CFR, while New Zealand shredded offers hover around US$385/t and Malaysian loose busheling at similar levels. Notably, UK and EU scrap sources remain largely unviable due to prohibitive freight rates, compounding the market’s stagnation amid tight rebar margins and subdued construction activity.

Pakistan

Pakistan’s scrap market has seen marginal price increases, primarily driven by rising freight costs that have pushed shredded offers to US$375-378/t CFR Qasim. However, this uptick has failed to stimulate significant buying interest as mills exercise restraint amid sluggish construction activity, weak finished steel demand, and compressed rebar margins. While some sellers anticipate prices potentially reaching US$390/t CFR, buyers remain hesitant given their comfortable inventory positions and the country’s persistent economic uncertainty. The limited purchasing reflects a broader caution in a market still struggling with fragile conditions and reluctant to commit to elevated price levels.

Turkey

Turkey’s imported scrap market has registered a modest improvement with US-origin bulk HMS 80:20 reaching US$339/t CFR, representing a slight US$1/t daily increase. Izmir mills have secured several US-origin cargoes at US$337-342/t CFR, with premium grades like shredded and bonus commanding up to US$359/t CFR, reflecting strengthening seller confidence. Nevertheless, most Turkish mills maintain a prudent approach due to persistently sluggish rebar sales that continue to constrain broader market participation. The short-sea segment shows limited activity, with Romanian-origin HMS 80:20 reportedly offered at US$318-320/t CFR, though many market participants question whether these levels can be achieved in current conditions. Despite cautious buying, sellers continue pushing for higher prices in anticipation of near-term market improvements.

Author: shipping inbox