Shipbreaking markets in the subcontinental regions are struggling due the the fresh surge in coronavirus infections — which is leading to lockdowns and affecting business — despite the rollout of vaccines globally, according to the latest shipping reports by GMS and Best Oasis.
Rising steel demand across the globe has pushed the offers for ships up while on the other hand end-buyers are expecting prompt delivery of vessels before the holy month of. Ramadan begins from April 13. Consequently, beachings will have to be done on a case-by-case basis.
Shipbreaking activity will not halt completely but a few yards are expected to shut down for the next seven days due to prevailing coronavirus situation in Gujarat, Maharashtra and other states. This is preventing many labourers from neighbouring states to go back to work in Alang after the Holi break.
The governments of various states are announcing restrictions and partial lockdowns due to rising COVID-19 cases with Maharashtra declaring movement restrictions after 8pm to 7am till April 30. There are similar night curfew restrictions in Gujarat, the hub of shipbreaking activities.
Shipbreaking scrap price this week remained mixed on account of financial year closing. Mills were seen buying raw material on a need basis though yards in Alang continued to witness shortage of tonnages.
The end-buyers are buying vessels which are naturally destined towards Alang for green recycling. A stainless steel chemical tanker with 3,292ldt was sold at $645/ldt.
The Bangladesh government has also announced a lockdown though it is still leading in the subcontinent market by offering highest prices for shipbreaking. The buying interest for vessels that will be delivered promptly is quite high ahead of Ramadan.
The Bangladesh Steel Manufacturer Association has written to Chattogram Port Authority regarding delay in berthing of ships carrying raw material as the mills are not getting enough supply.
Domestic demand for steel in Pakistan has improved and end-buyers have started competung with the rampant Bangladeshi market.
Market participants expect shipbreaking prices to decrease by 5-7pc once the union budget is announced, which will be presented in June.
Rising COVID-19 cases could also slow down the activity in Pakistan as getting the virus under control would be the priority.
Local scrap prices in Turkey remained stable and import scrap prices also improved in the last week. Turkish Lira remained volatile and was trading at 8.10 per USD.
Few units have reportedly arrived at Aliaga last week which will keep the local buyers busy for the next few months.