South Asian ship recycling markets witness mixed trends

• • Monsoon continues to limit Indian beaching activity

• • Import duty revisions challenge Pakistan’s recycling sector

South Asian ship recycling markets showed mixed trends in the week ended 7 July. Bangladesh’s outlook improved on expectations of higher vessel arrivals, India remained the most competitive destination despite monsoon disruptions, while Pakistan faced pressure from cheaper imported steel following recent duty revisions.

Alang remains competitive despite weaker rupee:

Ship recycling activity at Alang remained steady during the week, although the monsoon continued to limit beaching activity. Local steel plate prices softened to around INR 36,700/t ($385/t), keeping India the most competitive ship recycling destination in the Indian subcontinent. The price gap with Pakistan widened to nearly $310/LDT, while over 110 valid Statements of Compliance (SoC) continue to support Alang’s appeal for post-monsoon vessel arrivals.

India also advanced its long-term ship recycling ambitions by seeking EU approval for additional recycling yards. Over 30 facilities have applied, with six under assessment and three having completed the compliance process, supporting future access to EU-flagged vessels.

Meanwhile, the Indian rupee weakened against the US dollar, while post-monsoon vessel arrivals are expected to support recycling activity in the coming months.

Bangladesh: Vessel arrivals improve as Gulf traffic normalises:

Ship recycling activity in Bangladesh improved during the week as vessel arrivals resumed following the normalisation of shipping through the Strait of Hormuz. Around 550 merchant vessels, including 200 bulk carriers and 160 tankers, are expected to exit the Gulf, supporting higher recycling volumes in the coming weeks. Chattogram yards received the Zamrud (28,858 LDT) and ERGY (31,341 LDT), while Andhika Paramesti remained the latest benchmark sale at $460/LDT.

Market sentiment remained positive, supported by firm domestic steel demand and smooth LC availability. Although local plate prices eased to BDT 66,000/t ($536/t), participants expect recycling activity to strengthen as post-monsoon vessel arrivals increase.

Gadani recyclers face pricing pressure from cheaper imports:

Ship recycling activity at Gadani remained steady during the week, with local steel plate prices holding at around PKR 195,000/t ($702/t). Recent arrivals included the Jenny Lucky and Ladonna bulk carriers, while recyclers monitored the impact of Pakistan’s revised import duty changes.

Although no direct policy changes targeted the ship recycling sector, lower import duties on melting scrap and steel products are expected to intensify competition from imported steel, putting pressure on recycled steel demand and Gadani’s plate prices in the coming weeks.