South Asia: Ship recycling markets cautious as Middle East tensions add volatility

• Middle East tensions add volatility to recycling markets
  
  
• Limited vessel supply continues across the region
  
  

Ship recycling activity across the Indian sub-continent showed mixed trends in the week ended 10 March. Escalating Middle East tensions and rising energy costs added uncertainty to regional markets, while vessel supply remained limited across major recycling destinations. Although operational activity continued at most yards, geopolitical risks and currency movements influenced buyer sentiment and pricing dynamics.

India: Plate prices surge while Alang operations remain steady

India's ship recycling sector remained operational despite rumors of gas shortages linked to the Middle East conflict. Market participants said Alang yards continued normal operations, with shutdown concerns largely overstated.

Market participants stated "Ship recycling market has remained largely subdued, with a noticeable decline in vessel offers. According to ship brokers in Bhavnagar, no vessels have been sold over the past 10 days, reflecting limited activity and tight supply in the recycling segment. "

Domestic fundamentals remained volatile, with the Indian rupee weakening against the US dollar while local steel plate prices rose from about $400/t to $410-415/t amid scrap supply concerns.

Alang's anchorage saw a few small-LDT arrivals, taking the total to around six vessels exceeding 44,000 LDT.

Bangladesh: Sentiment cautious amid political and global uncertainties

Bangladesh's ship recycling market remained subdued as geopolitical tensions and domestic uncertainties weighed on buyer sentiment. The newly elected BNP government is expected to focus on economic stabilization after prolonged political disruption since the June 2024 coup.

Market fundamentals softened during the week, with the Bangladeshi Taka weakening against the US dollar and local steel plate prices easing to around $505-507/t.

Ship recycling activity slowed as well, with no fresh vessel arrivals reported at Chattogram and yards largely handling previously delivered tonnage. Despite earlier optimism among HKC-approved buyers, geopolitical uncertainty and economic volatility have kept purchasing activity cautious.

Pakistan: Limited arrivals as Gadani outlook remains uncertain

Pakistan's ship recycling market saw limited vessel arrivals last week, although demand and pricing remained relatively firm and broadly aligned with Bangladesh levels. A small-LDT general cargo vessel reportedly arrived at Gadani late in the week, while a few regional candidates were also heard heading toward Pakistani yards.

Market participants expect ongoing Middle East tensions to potentially redirect more vessels toward Gadani, particularly tankers, as rising freight and operating costs make recycling more attractive for older ships.

Domestic indicators remained mixed. Local steel plate prices held steady at around $591-595/t, while the Pakistani rupee strengthened slightly against the US dollar. If Gadani maintains competitive price levels compared with India, the market could attract additional regional tonnage in the coming weeks.