Ship Recycling Market Sustains Positive Trend Amid Regional Nuances

The ship recycling market has maintained an upward trend over recent weeks, according to reports from cash buyer Best Oasis and shipbroker Intermodal. While prices in India have stabilised near recent peaks after a strong run, a minor downward adjustment has been observed.

Best Oasis noted the Indian recycling market remains "quite buoyant", despite a recent strengthening of the US dollar potentially leading to a more cautious buying approach. No vessels were available for sale to Alang, India, during the reported week. Buyers in India continue to acquire sanctioned tonnage, which sustains the market. The continued absence of steel imports from Iran is seen as providing further impetus for ship-recycled steel.

Intermodal's report corroborated the resilience in Alang, attributing it to a stronger local steel market driven by the cessation of Iranian steel imports. However, the depreciation of the Indian rupee against the dollar has prompted some buyers to adopt a holding stance. For conventional tonnage within the subcontinent, India was noted as less competitive, with a limited pool of candidates. Nevertheless, activity persists through a focus on specialised non-ferrous rich vessels and the processing of sanctioned ships.

Subcontinent Market Dynamics

In Bangladesh, the recycling market remained stable, with local prices exhibiting moderate movement and no distinct upward momentum, Best Oasis reported. Buying interest is present, but buyers are not aggressively chasing higher prices. Interest is concentrated on bulk carriers and standard tonnage at moderate market levels. Intermodal added that Chattogram lacked fresh impetus, with tepid demand limiting vessel supply to support prices. A firm freight environment and elevated secondhand values in several mainstream segments are encouraging owners to keep vessels trading rather than opt for recycling. Despite this, a few dry bulk candidates entered the market, attracting interest from local buyers.

The Pakistan recycling market remains "buoyant", according to Best Oasis, with several buyers seeking tonnage, though vessel availability is limited. Buying interest is firm, and the ongoing absence of Iranian steel supports the demand for ship-recycled steel. Best Oasis concluded that the market is well-supported, with demand exceeding the available vessels. Intermodal's report on Gadani indicated a firm market with offers among the strongest in the subcontinent. Demand is healthy, but activity is constrained by limited vessel supply, with the absence of Iranian steel sustaining demand for recycled scrap. Inflation in Pakistan saw a marginal decrease to 8.26% in August from 8.32% in July.

Turkish Market and Policy Concerns

The Turkish recycling market remained largely stable during the week, Best Oasis reported, with no significant changes in demand or pricing. Market activity is controlled, influenced by regulatory requirements and vessel positioning. Yards are adequately covered with existing commitments, reducing the need to compete for new tonnage. Buyers prefer well-maintained, quality vessels and are cautious regarding less attractive units. The persistent weakness of the Turkish lira continues to impact market sentiment and pricing. Overall, the market direction in Turkey remains steady, with both buyers and sellers largely maintaining their positions.

Intermodal noted a modest improvement in the Turkish market, with prices marginally increasing due to firmer steel market conditions. However, demand for fresh recycling candidates has eased as yards concentrate on processing previously acquired tonnage. Higher energy costs and continued currency weakness are identified as key challenges for the recycling sector and the broader Turkish economy.

On the policy front, Intermodal highlighted that a recently introduced electricity-linked sales tax regime in Pakistan provides import-dependent steelmakers with a cost advantage over those using domestic scrap. This has prompted ship recyclers to engage with authorities to secure equal treatment for locally recovered material.