Ship Recycling: Weak Demand across the Board

 In its latest weekly report, Best Oasis (www.best-oasis.com), a leading cash buyer of ships said that “in India, the local market has dropped substantially this week with no real buyers. The difference between steel plates and scrap prices has reduced significantly, showing very low demand. Without government approval for ship-recycled steel under ISI standards, plate demand will remain low and more material will end up sold as scrap. This is hurting the industry and undermining the green recycling movement, while Europe is promoting refurbished steel and India’s stance is becoming counterproductive”.

Best Oasis also noted that in Bangladesh, “local steel prices continue to fall, with limited demand for very small vessels. However, mid-sized vessels above 10,000 tons are still seeing some buying interest. The price gap between steel plates and HMS scrap remains wide, in contrast to India, giving Bangladesh an advantage to purchase vessels at comparatively higher prices. This situation is likely to continue unless Bangladesh introduces rules similar to India regarding the acceptance of ship-recycled steel. In Pakistan, buyers are no longer willing to offer higher levels, adjusting their positions in line with the weaker sentiment. Offers have now been reduced to align more closely with Indian buyer levels, reflecting regional price pressure. Market activity remains subdued as cautious sentiment continues to dominate. Finally, in Turkiye, “import prices have improved by around USD 3 this week, while local prices remain unchanged. Overall market stability persists, with activity holding steady and movements largely influenced by external factors”, Best Oasis concluded.  Meanwhile, in a separate report, shipbroker Intermodal said that “the ship recycling sector witnessed weak demand and limited activity last week, with continued currency weakness adding pressure. India’s ship recycling market endured another challenging week, weighed down by weak steel market conditions and continued currency depreciation, which further dampened sentiment. Furthermore, the inflow of sanctioned vessels, acquired at steep discounts, has disrupted the competitive landscape, enabling some recyclers to undercut prices while others struggle to compete. Extended monsoon rains have compounded the slowdown, adding further pressure on market activity. Although Alang remains the subcontinent’s most active recycling hub, overall confidence stays fragile as recyclers adopt a cautious stance. At Gadani, the market eased back following the movement seen last week. Buyers maintained control, lowering their offers in line with neighboring India.  

The limited number of DASRapproved yards, most of which are already at capacity, further restricts activity. On the compliance front, yards that have completed most of their upgrades may soon receive HKC approval, with several already allowed to handle vessel imports. Meanwhile, the local steel market held largely steady. Bangladesh’s ship recycling industry continues to face significant challenges despite substantial investments in HKC compliance. Activity remains muted, as costly upgrades have strained yards, while failing to secure tonnage. Inflationary pressures and intensifying regional competition further undermine market confidence. The steel market remains unchanged, with a temporary post-monsoon recovery expected. The absence of infrastructure spending and ongoing political uncertainty add to the headwinds. Turkey’s market is subdued, though improving steel fundamentals offer a glimmer of optimism. However, recyclers face pressure, caught between the lira’s continued devaluation and rising domestic inflation, pushing costs higher and limiting profitability”, the shipbroker concluded.