Many HKC green vessels withdrew their offers from India this week and the situation in India’s ship recycling market deteriorated further this week, according to a report by GMS Weekly.
Bids have dipped below $300/ldt, the lowest since 2015.
Vessels are being diverted to Bangladesh and Pakistan markets, mainly since the national budgets passed recently in these two countries are being considered favourable for the industry.
In India, shipbreaking scrap prices fell by Rs500/mt in a week on low demand from mills. With finished and semi-finished steel prices declining, mills stayed from booking more material.
Yards also stayed away from bidding and most ship owners and cash buyers backed out from Alang shores. Though, two containerships, Kokura and Kawasaki with 34,000 ldt tonnage each were heard to have traded at $300-302/ldt.
According to the GMS Weekly report, the Bangladeshi annual budget was passed last week in which no major changes were announced for 2020. Meanwhile, in Pakistan, no economically viable reductions or changes in income taxes and customs duties were made in the budget.
The previously low Chattogram markets are now competing with Pakistan on availability of non-green vessels this week. However, Bangladesh managed to secure two PCTC units from Korean owners.
The Glovis Prime (14,498 ldt) and Glovis Phoenix (14,447) were both committed on an en bloc basis to a potential buyer, at $314/ldt basis an “as is” Singapore delivery, with about 500 tons of bunkers in the sale, which likely contributed to the impressive price on show.
Aiding Pakistan’s ship recycling sector was this year’s annual budget that reduced income tax from 4.5pc to 2pc; melting scrap prices for import resulted in income taxes being reduced from 5pc to 2pc and custom duties on the duties on the import of ships have also been slashed from 2pc to 0.
Cash buyers have concluded to local buyers and vessels have also been diverted from a dire and declining Alang market to the Gadani market.
The Turkish market continues to record minor improvements week after week. Steel prices improved to $260/mt, as Turkish Lira remained steady at TRY6.8 against the US dollar. On the local deliveries front, at least 2 undertow units have arrived in Aliaga and owners are also chasing buyers for offers on various units.
($1 = INR 76.02, TRY6.85)