India’s shipbreaking tonnage rose to 222,772ldt, up by 2pc from the prior year and up 28pc from December amid increased scrap demand on the back of strong steel consumption. Bangladesh’s tonnage rose by 16pc to 20,9587ldt and increased by 8pc from December on stable demand from mills restocking scrap. While Pakistan’s intake fell by 52pc to 75,434ldt from December on weak steel demand, according to GMS data. Pakistan’s tonnage is up significantly from a year ago against a low base in January 2019 as Gadani port was then barred from recycling ships.
Recyclers in India topped shipbreaking volumes in the subcontinent with 28 ships reaching Alang in January, while 15 and 5 ship beached at Chittagong and Gadani port, respectively. Higher iron ore prices and improved steel demand encouraged Indian ship recyclers to increase vessel bookings, while lower steel demand and subdued steel prices held back Pakistani and Bangladesh buyers.
Ship scrap prices mixed
Ship scrap prices in the subcontinent managed to halt their downtrend last week. In mid-January prices slid by almost $100/mt after hitting a high of $500/ldt in early January. Market participants indicate that the prices have bottomed and expect prices to rise in the coming days.
Scrapped vessel bids rose to $420/ldt for dry bulk in Bangladesh amid hectic inquirers by Chattogram-based recyclers on the back of strong domestic demand. Mills are have a positive outlook on steel demand and prices driven by expected steel imports from China post the Lunar New Year holidays.
In India, spurred by the government plans to expand shipbreaking capacity at Alang and higher allocation for infrastructure projects in FY2022, ship prices recovered during the week with indication at $410/ldt for dry bulk.
Steel fundamentals in Pakistan further weakened pushing Gadani-based recyclers away from the market. Domestic steel plate prices dropped by $20/mt slowing scrap trades and weighing down indications to $400/ldt for dry bulk.
In Turkey, steel prices continue to fall pressuring strap prices. Recyclers are expected to stay away from booking tonnage amid price volatility. With indications at $250/ldt for dry bulk, it less likely that ship owners would sell to Turkish recyclers.