DDespite challenging overall conditions, ship recycling markets have remained steady, with Bangladeshi recyclers clearly outperforming. In its latest weekly report, the best oasis (www.best-oasis.com), a major cash buyer of ships, said, “The Indian domestic market remains healthy, with overall sentiment stable. However, the exchange rate remains very high, limiting India’s ability to compete with Bangladesh and Pakistan for regular tonnage. As a result, India is expected to remain mainly limited to niche assets, while bulk carriers and tankers are likely to continue to move towards Bangladesh and Pakistan where rates remain more competitive.”
Source: Best Oasis
Meanwhile, “The Bangladesh market remains steady, although local market conditions have eased compared to the strong momentum seen over the past two weeks. Buyers remain keen to acquire vessels, but their appetite has become more cautious. Heavy rains in Chattogram have affected activity and reduced spot demand in the market. With the monsoon season approaching, prices are expected to remain within the current range, although sentiment may remain slightly negative over the next two-three months due to weather disruptions and slowing demand. Pakistani market no major change this week, with sentiment remaining steady at similar levels to last week, but Pakistan is still unable to compete with Bangladesh on pricing. The market is supported by a shortage of imported scrap and shredded steel from the Gulf region in the wake of recent regional tensions. This shortage has given the market strength, although the active buyer base remains limited, and has supported recent ship sales reported at around US$456. Finally, the Turkish market is largely unchanged this week, Best Oasis concluded. She said: “Activity at the local sentiment level or price levels continues at a steady pace, with the market remaining stable in a manner similar to previous levels.”
In a separate note, shipbroker Intermodal commented that “the gap between diplomatic action and market reality set the scene last week, impacting ship recycling market dynamics. The initial framework between the US and Iran briefly raised hopes of a normalization in Hormuz, but shipping markets told a different story, with profits rising and owners unwilling to phase out tonnage. Conditions at Alang remained under pressure, with deteriorating steel fundamentals exacerbating an already difficult currency landscape. The domestic steel market weakened broadly, with inventory building up.” Despite the rupee’s partial recovery, the exchange rate continues to erode India’s competitiveness, pricing alang outside the prevailing ton range. Bangladesh maintains its lead in the Indian subcontinent, although prices have softened significantly from recent weeks after appearing flat for most of the quarter, weighing on recyclers’ sentiment.
Source: Multimedia
Buyers’ appetite has become more conservative, shaped by the approaching monsoon, early rainfall that has already disrupted Chattogram operations, and a softer steel sector. The taka rate has remained stable, and the LC trade finance channel continues to operate without meaningful friction. However, with the seasonal window narrowing and recyclers becoming more hesitant, the near-term outlook has a distinctly cautious tinge. In Gadani, the market remained steady throughout the week, with the overall outlook little changed from the previous week. The domestic steel market has retained a degree of solidity, supported by a lack of scrap imports from the Persian Gulf, as a direct result of the closure of the Strait of Hormuz. The desire to obtain the load remains real, as supply, not demand, is the binding constraint. However, the broader economic backdrop has become more tense, as the country faces severe inflationary pressures, casting a shadow over the economic outlook. Türkiye remains largely marginalized, with a falling lira, accelerating inflation, and slowing domestic steel demand offering little encouragement.
Nikos Rousanoglou, Global Hellenic Shipping News
