Shipbreakers in Alang, India are operating at 65pc to 70pc capacity amid a crippling shortage of oxygen cylinders. The operational costs of yards rose by Rs2,000/mt during the week due to a steep rise in the price of oxygen cylinders. In Bangladesh, the local market has improved, however, not a single deal concluded through the newly formed committee of recyclers. Demand for ship scrap in Gadani, Pakistan remains stable but demand for finished steel is still declining. In Turkey, steel plate prices softened further this week, only EUSSR-based green recycling units seems to be arriving lately.
Vessels entering the ports across the globe are facing a lot of challenges due to strict quarantine rules as COVID-19 cases are increasing at a faster pace.
Shortage of oxygen continued to hold back ship scrap generation in Alang. For the last three weeks, yards in Alang are facing a major shortage of oxygen. Without oxygen, most hot work-related cutting operations are on a standstill. Prices of oxygen cylinders have hit an all-time high. Despite the high prices, recyclers are trying all possible means to arrange for oxygen, but the supply chain is extremely tight.
Steel demand from the construction sector is badly affected by the rise in COVID-19 cases in India. Data suggests that India has reached Stage 3 of the pandemic and the second wave has already begun. Prices for ship plates declined by $5/mt in the local market amid low demand from end-users.
Prices of ship plates in Bangladesh have improved by $6/mt in the local markets, also the demand for melting scrap is picking up lately.
As Pakistani recyclers are quiet, Bangladeshi recyclers are cautious of placing their offers. So far the newly formed committee of recyclers is observing the market. It will take some more time to begin operations.
Demand for ship plates and melting scrap from the local markets in Pakistan was quite stable this week. There is surplus inventory in this region and under such circumstances if the demand for finished steel remains subdued the prices of ship plates are expected to drop. However, Pakistan still remains the top destination for scrapped vessels in the sub-continent.
Lira this week has stabilised and even improved against the US dollar, however, demand for steel plates has declined lately. With further softening of prices, import of containerized HMS in Turkey was slow throughout the week. COVID-19 cases are still increasing rapidly in Turkey but no lockdowns are announced.