The subcontinental shipbreaking market was on a wait-and-watch mode as global steel prices were range-bound in the week ending on Saturday, amid budget presentations in Pakistan and Bangladesh.
Markets in India are slowly showing signs of recovery as COVID-19 cases are declining and lockdown restrictions are being eased in various regions.
Shortage of vessels for demolition persist and prices are likely to pickup in the near term as domestic demand is firm.
Steel prices in India were on uptick in the previous week but shipbreakers were unable to secure any HKC vessels due to high prices. They are waiting for vessel prices to decline in the near term.
Gas-cutting activities are slowly getting back to normal in Alang as supply of oxygen resumed and easing of lockdown restriction has enabled transportation activities to resume.
Domestic steel prices are still of 20-25pc less than international prices.The main supply of vessels continued to be non-ferrous (stainless steel) units.
Shipbreaking scrap prices trended up amid supply crunch and firm demand from the rolling mills. The daily Davis Index for HMS attachments and Melting rose by Rs1300/mt ($17.85/mt) ex-Alang on Friday as compared to the previous week.
In the annual budget, the finance minister has focused on improving the domestic industries by exempting tax on ‘Made in Bangladesh’ products. Yards are focusing more on booking smaller LDT vessels ahead of monsoon to avoid lengthy cutting time.
Ahead of the budget scheduled on June 11 shipbreakers are cautious. There are rumors in the market that the mercury-laden tanker that was bought late last month, has been given a clean chit as the amount of mercury content was negative. Local steel prices are also under pressure.
Markets in Turkey remained steady in the previous week with imported scrap prices largely flat. Turkish Lira depreciated to a historic low to TRY 8.7 against the US dollar which kept Aliaga recyclers on toes. Availability of tonnage is still low in Aliaga which has kept the vessel price levels steady.