Ship Recycling: Year ended on a positive note: STAR ASIA
The ship recycling markets in the Sub-Continent ended the year on a positive note, marked by a steady recovery and a gradual improvement in the supply of end-of-life vessels.
Several ships were sold during this period, with a notable number of deals still under negotiation. The uptick in activity has injected a sense of cautious optimism into the industry, signalling a potential steadiness after a challenging phase. Recyclers remain hopeful that the momentum will carry into the new year, fostering stability and continued support to the ship recycling sector.
Alang, India
The Sub-Continent ship recycling markets held steady this week, with domestic recycling prices maintaining their stability and helping restore confidence among industry participants. This stability, coupled with key sales, has sparked renewed optimism in the sector.
Alang saw notable activity, including the sale of the VLCC Itagua to local recyclers and the Aframax tanker Enzo. The sale of tankers for recycling is viewed as a promising sign, suggesting a potential shift in market dynamics. Recyclers believe this development could mark the beginning of an uptick in supply from the tanker segment, providing a much-needed boost to the market.
Looking ahead, as freight rates experience a temporary lull, a significant number of ships that were initially slated for recycling but delayed due to market conditions are expected to re-enter the supply pipeline. This influx of vessels is likely to revitalise domestic secondary mills, many of which had been shuttered due to a lack of raw materials.
However, market participants remain cautious, closely watching global freight trends and economic indicators that could influence supply and pricing dynamics.
Chattogram, Bangladesh
The ship recycling market demonstrated sustained strength this week as domestic ship scrap prices inched upward, bolstered by improving local demand. This marks a notable shift following a period of stagnation since the interim government assumed office.
The gradual price recovery reflects a combination of factors, including increased activity from local steel mills seeking raw materials and enhanced confidence in the economic outlook.
However, the market’s upward trajectory remains cautious as challenges such as fluctuating global steel prices could influence momentum in the coming weeks.
Gadani, Pakistan
The local ship recycling market endured another challenging week as ship prices remained subdued under the weight of cheaply available imported Chinese semi-finished and finished steel products. The influx of low-cost semi-finished and finished steel products from China dampens domestic market sentiment, posing a significant obstacle to domestic price recovery.
Due to this, the recyclers in the region are facing fierce competition from neighbouring markets, particularly India.
Despite these headwinds, overall demand for end-of-life vessels remains steady at the prevailing prices.
Anchorage & Beaching Position (DECEMBER 2024)
Aliaga, Turkey
The Turkish hot-rolled coil market continues to experience weak demand. Export activity remains subdued due to the winter holiday season.
Turkish mills, meanwhile, are adjusting their February delivery prices upward, citing recent increases in scrap values and production costs. Despite these price hikes, Turkey’s fourth-quarter EU tariff quota for HRC remains underutilised at 33% of the allocation, reflecting the broader market challenges.
The ship recycling market remains quiet, with not much activity to report.
Sub-Continent and Turkey ferrous scrap markets insight
Weekly Market Report: Sub-Continent Scrap Markets Face Regional Challenges Amid Persistent Cautious Sentiment
The Subcontinent scrap markets exhibited cautious sentiment this week as India, Pakistan, and Bangladesh grappled with unique regional challenges. A domestic steel market slowdown, liquidity constraints, and economic hurdles suppressed activity across the board, leaving trading volumes thin amid persistent buyer resistance and broader economic uncertainties.
India: Buyers Await Post-Holiday Market Movement
Indian buyers adopted a wait-and-see approach this week, influenced by a slowdown in the domestic steel market and reduced supplier activity ahead of upcoming holidays.
Market activity remained subdued, with some yards temporarily halting operations until after the festive period.
Indicative offers for shredded scrap from the UK/Europe and the US ranged between US$380-385/ton CFR Nhava Sheva, while HMS (80:20) offers were at US$360-365/ton CFR from the UK and US$365-370/ton CFR from West Africa. A supplier noted, “Current offers for shredded scrap are around US$375-380/ton, but buyer interest remains limited. We anticipate prices to rise by at least US$10/ton post-holidays.”
Pakistan: Liquidity Crunch Dampens Trade
Pakistan’s imported scrap market remained subdued, weighed down by liquidity challenges, year-end financial closures, and cautious buyer sentiment. UK-origin shredded scrap offers stayed firm at US$390-393/ton CFR Qasim, while UAE-origin HMS was priced at US$380-385/ton CFR. Domestic scrap traded at PKR 135,000-140,000/ton, with rebar prices at PKR 240,000-245,000/ton.
Reduced mill operations, weak domestic demand, and minimal trading volumes reflected a bearish market sentiment. Seasonal factors and financial closures increased the slow pace, with limited deals reported throughout the week.
Bangladesh: Economic Hurdles Constrain Recovery
Bangladesh’s imported scrap market struggled under the weight of LC delays, banking restrictions, and rising dollar rates, all of which constrained liquidity and hindered recovery efforts. Offers for UK/Europe origin shredded scrap hovered at US$390-395/ton CFR Chattogram.
On the domestic front, rebar prices saw modest increases, reaching BDT 78,000- 82,000/ton, while billet was priced at BDT 62,000-63,000/t. Although seasonal demand for rebar provided slight support, weak infrastructure development and economic challenges kept the market subdued. The outlook remains cautious as broader challenges overshadow prospects for recovery.
Turkey: Market Quiet Amid Absence of Firm Offers
The Turkish imported ferrous scrap market was largely inactive this week, with no firm offers or bids reported. Market participants remain on the sidelines, awaiting clearer price signals to guide trading activity.
