Market conditions in the subcontinental shipbreaking markets have improved with steel production in India, Bangladesh, Pakistan, and Turkey increasing supported by healthy demand in the auto and infrastructure sector.
According to the GMS weekly report, the upcoming US presidential elections and lockdown in Germany and France due to the resurgence of COVID-19 is likely to impact the markets.
Tonnages offered to yards increased on the back of firm prices for melting steel scrap and ship plates. Shipbreaking scrap prices in India increased driven by healthy demand from mills. Mills looked to purchase HMS 1&2 (80:20) to complete pending and fresh orders ahead of the festive season.
A vessel named Karnika of 29,773ldt was sold at an auction in Alang for recycling at $380/ldt.
Steel prices have ended their downtrend despite demand failing to recover, mainly on the back of a rise in input costs. Market participants, however, believe the rise is unlikely to sustain.
In the ship recycling market, some buyers are unable to land tonnages as they were up against cartels opting for private cash deals.
Domestic shipbreaking scrap equivalent to P&S traded at BDT31,500/mt ex-yard Chattogram, down by BDST500/mt. Deals for HMS 1&2 (80:20) were at BDT29,000-29,500/mt ex-yard Chattogram.
The region expects an increase in exports ahead of the year-end holiday season.
Scrapped ship tonnages offered in the Pakistan market were the highest than any other last week. Amongst the deals concluded, Chinese bulker Welview was sold for $385/ldt.
But, slower recovery in demand and the resulting pressure on steel prices dampened the sentiment for ship plates and melting scrap.
According to Pakistan’s Financial Action Task Force (FATF), the country remains under ‘Grey List’ until February 2021, which would make it difficult for the country to get financial aid from the International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB) and the European Union, exacerbating the cash-flow crisis.
Fluctuation in Turkish plates’ prices in the previous week failed to attract buyers.
The depreciation of the Turkish Lira could negatively impact scrap prices in near future. Moreover, Turkey was hit by an earthquake on October 30, which has impacted the West coast and could delay import and export activities for the coming days.