South Asia: Compliance delays in Bangladesh disrupt scrap ship flows; India, Pakistan witness fragile demand

• Tariff uncertainty puts pressure on Indian recyclers
  
  
• Bangladesh yards face HKC certification delays
  
  

South Asia's ship-breaking markets face growing uncertainty as Bangladesh grapples with HKC delays, while India contends with tariff pressures, currency weakness, and cautious sentiment despite improved vessel arrivals at Alang. Only Pakistan saw a fleeting opportunity to regain market momentum ahead of the implementation of new global regulations.

Alang falls to third place in global recycling rankings

India's ship-breaking market remained slow, with cautious sentiment prevailing. Economic challenges continue to weigh on market activity, as the Indian Rupee weakened against the US dollar amid tariff pressures and trade uncertainties. Local steel plate prices also dropped by around $2/t. India fell to the third place in global recycling rankings this week.

Despite subdued sentiment, regional instability and limited competition from Chattogram have made India a safer, more attractive option for vessel owners. Indian recyclers have increased bidding activity, potentially leading to a busier monsoon season. Alang outperformed Gadani this week, with six ships totalling 33,000 LDT arriving or being delivered, including a large passenger vessel.

Limited vessel arrivals in Pakistan

Pakistan's ship-breaking market in Gadani recently gained a brief opportunity to secure more vessels, as Bangladesh faced NOC restrictions and India grappled with tariff issues. However, this window is short-lived with the Hong Kong Convention set to be enforced from 26 June, requiring stricter yard compliance.

Gadani has climbed in market rankings, but local recyclers remain uncertain. Weak fundamentals, a falling Pakistani Rupee, and declining steel plate prices suggest possible price drops. This volatility leaves buyers unsure whether to keep higher offers or match Indias lower levels.

According to a market participant, "The market is currently quiet with limited vessel arrivals. Sentiment remains weak for now, and most participants expect activity to pick up only after the upcoming budget."

Chattogram sees HKC certification delays

Bangladesh's ship-breaking market is constrained by delays in Hong Kong Convention (HKC) certifications. With only seven certified yards operational, many sellers are diverting tonnage to India and Pakistan. Most yards still need major infrastructure upgrades, making Chattogram less attractive for vessel owners and buyers despite some yards nearing approval.

Market volatility is increasing as non-HKC recyclers face difficulties importing tonnage. Despite a recent sharp rise in steel plate prices, offers from HKC-certified yards have softened. Demand from domestic steel mills is also weakening and is likely to decline further during the approaching monsoon season.

Last week, Gadani Port received no new vessel, a trend continuing for the last one month.

Alang Port received 32,667 light displacement tonnage (LDT) last week, down from 26,382 LDT in the previous week.

Chattogram Port received 66,753 LDT compared with 37,773 LDT in the previous week.