The ship recycling market has retained its overall strength, on the back of strong buying sentiment. In its latest weekly report, Best Oasis (www.best-oasis.com), a leading cash buyer of ships said that “the Indian recycling market remains firm, with overall buying sentiment continuing to be positive. Local steel prices have shown some improvement during the week, providing support to the market. However, the benefit of stronger steel levels has been partly offset by movements in the US dollar. Buying interest remains healthy, while the availability of recycling candidates continues to be limited as strong freight markets encourage owners to keep vessels trading. Overall, India remains a well-supported market, with firm sentiment despite limited availability of tonnage. The Bangladesh recycling market has slowed somewhat during the week, with local market levels coming off and buyers showing a more cautious approach. Softer scrap prices, including lower HMS 1 & 2 levels, have also weighed on immediate buying sentiment and restricted any significant improvement in the market. Despite the current softness, market participants remain hopeful that conditions will improve in the coming days as demand for scrap strengthens. Overall, the market remains relatively subdued for the time being, with buyers monitoring local steel and scrap developments before becoming more active”.
Meanwhile, “the Pakistan recycling market continues to see interest from several buyers actively looking for tonnage, although pricing remains broadly similar to last week with limited upward movement. Market indications remain wide, with offers ranging considerably between buyers, making price discovery somewhat difficult at present. Imported HR coil from China continues to provide competition to the local market, adding another consideration for recyclers when assessing buying levels. Sales activity has slowed, while the availability of suitable recycling candidates also remains limited as strong freight markets continue to keep vessels in commercial trading. Finally, the Turkish recycling market has shown some improvement this week, with local recycling prices edging slightly higher amid modestly improved market sentiment. Easing inflation and signs of improvement in the domestic economic environment have provided some support to local recycling activity. At the same time, a greater number of recycling candidates have been circulating in the market, which could place some pressure on buying levels if tonnage availability continues to increase. Turkish yards continue to operate close to full capacity, providing stability to the market. Overall, the market is slightly firmer this week, although no significant movement in pricing is expected in the near term”, Best Oasis concluded.
In a separate report, shipbroker Intermodal noted that “last week, ship recycling markets across the Subcontinent showed mixed signs, with India having strong fundamentals, while Bangladesh and Pakistan reporting a weaker sentiment. Turkey posted an improvement. Alang remained robust with strong domestic demand and positive sentiment. Local steel prices slightly softened, however remain at healthy levels. Limited interest emerged during the week, with more appetite on the specialized tonnage due to the strong freight market on the conventional vessels. On the policy side, attention is focused on the upcoming EU decision regarding the inclusion of the two Indian recycling yards on the EUs approval list, which still remains as a proposal with officials arguing about an objective assessment, while Gujarat Maritime Board continues its efforts for full compliance with HKC requirements. In Bangladesh, muted demand and a sluggish steel market continue to constrain market sentiment.
There was limited improvement in the recycling candidate pool, with buyers being cautious and selective. However, firming of local currency against USD provides a positive note. On the broader economic front, surging natural gas prices are constraining the country’s ability to secure supplies, prompting the government to seek alternative sources to replace lost Middle Eastern volumes. In Gadani, overall market momentum has softened, limiting the interested recycling candidates only in the LNG segment. The sales activity is stagnant with yards still feeding off with previous secured tonnage. The landscape in the local steel market is mixed amid a slight drop in steel prices and firming of local currency vs USD. Imported Chinese HR coil under government support for scrap imports, sustains steel mills’ demand as tonnage is currently scarce, creating pressure to breakers. The Turkish market shows signs of recovery, as demand firmed and an increased number of recycling candidates showed up”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
