Last week’s recovery in dry freight offered recycling buyers little encouragement. This week, however, sentiment has improved across the sub-continent, with recyclers showing greater willingness to compete for available tonnage. Bangladesh continues to lead the market, while Pakistan and India are also displaying renewed confidence. Despite improving buying interest, the shortage of suitable recycling candidates persists as owners continue to benefit from attractive trading alternatives.
The Strait of Hormuz supplied another reminder of the fragile security environment surrounding Gulf shipping. A tanker was attacked near Khasab, Oman, on October 29, reportedly sustaining an engine-room fire before resuming its voyage. The incident renewed concerns over passage security and insurance costs. For ageing tanker owners, disrupted trading patterns and restricted effective vessel availability continue to support employment opportunities rather than encourage recycling decisions.
Oil markets responded to the renewed uncertainty. Brent advanced above USD 117 per barrel on Friday, while WTI approached USD 104 as concerns over Middle Eastern supplies persisted. Elevated energy costs continue to pressure recycling operations and steel production, particularly across the sub-continent. Yet the same uncertainty can support tanker earnings, keeping older vessels commercially attractive for longer than recyclers would prefer.
Dry freight offered mixed signals. The Baltic Dry Index edged higher from 2,693 last Thursday to 2,712 on October 29, supported by Capesizes strengthening to 4,090. Panamaxes, however, weakened to 1,921, while Supramaxes eased to 1,870. The divergence suggests that pressure is emerging in selected vessel segments without producing a broader deterioration in earnings. For recycling buyers, the prospect of additional candidates remains encouraging, but there is still little evidence of a sustained increase in supply.
Steel markets provided no common direction. Indian plate recovered from an early-week decline to finish at INR 43,300 per ton, while Bangladesh remained steady at BDT 66,000. Pakistan moved in the opposite direction, falling from PKR 195,000 to PKR 188,000 per ton. Chinese steel also softened marginally to USD 307.47 per ton. Despite these uneven fundamentals, improving sentiment and persistent candidate scarcity continue to support buying interest.
Physical waterfront activity continued at Alang and Chattogram, with several previously secured vessels completing delivery, while Gadani reported no new movements. Bangladesh also received potentially important regulatory news, with the reported reclassification of ship recycling from the red to orange environmental category expected to simplify future yard approvals. The development has encouraged local sentiment, although implementation and environmental compliance considerations remain important.
Bangladesh retains the strongest conventional buying appetite, Pakistan is becoming increasingly constructive despite weaker steel, and India continues to benefit from specialist opportunities. Turkey remains selective within its established regional market. Across the sub-continent, buyers are showing greater confidence, but freight earnings and second-hand alternatives continue to favour owners. The willingness to buy is growing. The willingness to sell remains the missing ingredient.
