Ship Recycling Shows Mixed Display Last Week

The ship recycling market showed mixed performance over the course of the previous week. In its latest weekly report, Best Oasis (www.best-oasis.com), a leading cash buyer of ships, said that “the Indian market has come off drastically this week, reflecting heightened pressure and subdued activity. Local steel sales remain very poor, with demand virtually absent, further dampening overall market sentiment. Industry participants are growing increasingly cautious, adopting a wait-and-watch approach as uncertainty continues to dominate the outlook. In Bangladesh, the market remains soft, with steel demand continuing to fall and sentiment staying weak across the sector. Ongoing foreign exchange shortages are adding further strain, leaving many industry players cautious and hesitant to commit.

Source: Best Oasis

Around 17 yards are already HKC compliant, while the others are still chasing NOCs, though fresh approvals from the Ministry look unlikely. In Pakistan, the local market remains depressed, with smuggling of goods from Iran weighing heavily on prices and sentiment. Buying interest is extremely limited, with only a handful of buyers and breakers active in the market. Current offers are slipping further, with buyers now positioned closer to the USD 400 level. Finally, the Turkiye market recorded no change this week, with both prices and activity holding at the same levels. Such stability is not unusual for Türkiye, where the market often moves only when clear external triggers emerge”.

The ship recycling sector displayed mixed performance last week, with subdued activity in India and Bangladesh, while Pakistan witnessed some action amid persistent steel market weakness. In India, the outlook remains subdued. Recent U.S. tariffs tied to Russian oil imports are curbing export earnings and prompting foreign investment outflows, while exerting further pressure on the rupee. Weak steel market conditions, including falling prices, are weighing on the ship recycling sector, with arrivals failing to lift sentiment in Alang. The government anticipates a postmonsoon recovery in steel demand, which should support ship recycling, while ongoing GST reforms are expected to bolster industrial activity and broader economic growth. In Pakistan, the market saw some activity last week, with some bulkers finalized, lifting sentiment while reducing the already limited number of available DASR-certified. The steel sector remains under pressure, though a post-flood recovery is anticipated.

Source: Best Oasis

Despite efforts to meet HKC standards, buying interest remains uncertain. Encouragingly, Pakistan’s lower tariffs compared to its Subcontinent neighbors provide Gadani with a competitive advantage in attracting vessels. Bangladesh’s ship recycling market stayed lackluster, held back by a sluggish steel sector, weak demand, and cautious sentiment. On the compliance front, progress continued, with 18 HKC-certified yards now operational and three more nearing completion of upgrades. The limited number of certified yards has constrained activity post-HKC, though the reception of larger vessels since enforcement has partially offset this. Broader economic sentiment showed cautious optimism, as September’s rise in foreign reserves pointed to potential government support, even as business confidence remains fragile. In Turkey the market witnessed some action after weeks of stagnation, mainly by EU-listed facilities, actively processing units. Steel market is improving, amid a demand up tick for finished steel products.
Nikos Roussanoglou, Hellenic Shipping News Worldwide