Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Ship buyers in Gadani booked high-priced bulkers amid a slowdown in the tonnage available for recycling. Pakistani cash buyers and ship breakers are pushing up prices to secure tonnage as ship recyclers in India and Bangladesh wait for prices to cool-off.


India and Bangladesh-based recyclers chose to wait-and-watch until prices return to reasonable levels, which is possible only after yards in Gadani reduce their buying. Enquires from Indian and Bangladesh have increased this week. 


Vessel prices have declined by $150/ldt during this pandemic, ship breaking trade is therefore expected to get busier and more bullish in the fourth quarter of the year.


In India, an alarming rise in COVID-19 infections has kept ship breaking activities in the country on the back foot. Rise of infections observed in Hong Kong, Europe and the US have also raise concerns. Markets in Turkey improved by about $10/ldt this week as cruise vessels continued to reach Aliaga at a steady pace.



The country is still struggling to secure tonnage as Pakistani buyers are quite ahead in the price ranking and have shown no sign of slowing down. On the other hand, India is securing all the HKC-based green recycling tonnage. A new benchmark of $350/ldt on bulkers has been set by Pakistan, which cannot be matched by Bangladeshi buyers. Upcoming Eid holidays may give buyers a chance to re-evaluate their pricing strategy and raise bids in August.



Shipbreaking rolling prices in Alang this week declined by Rs900-100/mt amid low demand from re-rollers. Shipbreakers lowered their offers in order to clear the piled-up inventories. However, steel prices are expected to improve with the government’s intent to support the infrastructure sector, a major consumer of steel in India. Demand for local plates have improved, pushing the Davis Index for 5kg plates increased by Rs800/mt to Rs27, 350/mt and scrap prices rose by Rs700-800/mt ex-Alang on Monday.


On the supply front, only HKC green units have been booked at the ports. Three vessels from Maersk TOVE MAERSK, MCC MERGUI, and MCC HA LONG (all 7,362 LDT) have been sold to cash buyers at $233/ldt.



Pakistan is expected to remain a major buyer this week pushing the bulker prices to $350/ldt. The vessel MJ BULKER (8,071 LDT) was finalized for $352/ldt and ALBY MELODY (7,528 LDT) was booked at $359/ldt, which is considered to be the highest ever price paid by Pakistani buyers in years. Non-HKC green tonnage owners are keen to sell to Pakistan giving the high prices and buying capacity.



Turkish steel and vessel prices rose by $10/mt this week, with container prices at $200/mt. Yards in Turkey remained silent with overall less tonnage, however cruise vessels under EUSSR-based recycling are expected to arrive at Aliaga’s waterfront this week. The pandemic is under control and yards in Turkey are working at full capacity.

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