South Asia: Imported ship-breaking tonnage rises over 25% m-o-m in Dec'23; India leads with lion's share

In December 2023, the South Asian ship-breaking industry experienced a noteworthy surge, with a 27% uptick in total tonnage processed. Among the primary recycling hubs, India reported a whopping 325% increase in tonnage, whereas Bangladesh saw a substantial 86% drop as compared to 46,057 LDT in November 2023.

Notably, Pakistan witnessed slow ship-breaking activity in December, with a 99% drop in total tonnage accumulated as compared to 16,180 LDT in November 2023. It's important to highlight that India, Bangladesh, and Pakistan collectively dominate the global ship recycling market, accounting for over 90% of its share.

A total of 20 vessels were demolished in December 2023, for a total tonnage of 110, 385 LDT. Out of the total vessels received, the majority of the vessels were tankers and bulk carriers. Tankers share increased by 160% m-o-m with 42,052 LDT (3 vessels) as compared to 16,180 LDT (1 vessel)  in the previous month, and containers share also witnessed a whopping rise of 288% m-o-m with 22,777 LDT (3 vessels) as compared to 5,866 LDT (1 vessel) in November 2023. On the other hand, bulk carrier share dropped by 37% to 25,148 LDT (5 vessels) as compared to 39,690 LDT (4 vessels) in November 2023.

India

In December, the total ship recycling volume reached 110,385 LDT (Light Displacement Tonnage). India contributed 103,960 LDT to this total, marking a 325% increase from the 24,449 LDT reported in November. As per data, Alang received 15 vessels in December, showing a substantial 275% increase from only 4 vessels in the previous month.

Trade activities remained slower in December compared to the previous month, but it's expected to slow down during the first week of the new year and resume afterward, according to trade sources.

Pakistan

Pakistan witnessed the lowest tonnage of this year after being inactive for over 6 to 7 months (February to August 2023). In December 2023, Gadani received a total tonnage of 200 LDT, a significant drop from November, when 16,180 LDT was reported in Gadani owing to challenges such as LC issues and currency crises. Only a few individuals were successful in obtaining LC approvals, leading to a slow market.

In terms of pricing, the Pakistani market has now surpassed the Bangladesh market, securing the second position after India.

Bangladesh

Bangladesh experienced a remarkable 86% drop in ship recycling tonnage in December, reaching 6,225 LDT compared to 46,057 LDT in November. However, obtaining LCs for vessels with higher tonnage posed challenges.  Chattogram received a total of 4 vessels in December compared to 7 in November, marking a 43% decrease from the previous month.