India gains momentum as Bangladesh ship recycling market faces pressure

According to The Maritime Executive, the ship recycling market in India is gaining momentum, with improving steel demand as a key factor. The latest Market Outlook reports a second consecutive week of rising local steel plate prices, up by USD 4/MT, semis and finished steel products by USD 2–4/MT, and imported scrap by USD 1/MT. Recycler offers have remained unchanged but are expected to improve if the stronger steel demand continues.

Steel Demand Boosts Indian Market

The positive outlook for India is due to increased local steel plate prices, which have risen by USD 4 per metric ton (MT), semis and finished steel products by USD 2–4/MT, and imported scrap by USD 1/MT. These increases follow foreign-exchange inflows totaling USD 41 billion following central-bank measures introduced in June. The local currency has strengthened marginally despite higher oil prices.

Wirana Shipping's Vice President Middle East and Green Recycling Coordinator, Hitesh Vyas, highlighted the encouraging signs: "The improvement in India is encouraging, but we need to see it continue for another couple of weeks before we can say the market is on firmer ground."

Bangladesh Faces Tougher Market Conditions

In contrast, the ship recycling market in Bangladesh continues to face challenges. Domestic steel demand remains slow, leading to local steel plate and scrap prices increasing by USD 4/MT and USD 2/MT respectively, while imported shredded scrap fell by USD 5/MT and imported scrap by USD 4/MT. Recycler offers have softened as domestic market conditions worsen.

Vyas further explained: "Bangladesh is facing a tougher combination of slow steel demand, softer imported scrap prices, and financing constraints. With relatively few recycling candidates available, local market conditions will continue to have a significant influence on pricing."

Market Outlook for the Region

The overall recycling tonnage supply remains slow to moderate, with new candidates mainly coming from the dry segment. Pakistan and Turkey have remained broadly stable during the week.

Hitesh Vyas added: "The improvement in India is encouraging, but we need to see it continue for another couple of weeks before we can say the market is on firmer ground. Bangladesh is facing a tougher combination of slow steel demand, softer imported scrap prices, and financing constraints."

What this means for operators

Ship operators based in India may benefit from improved local conditions, potentially leading to better recycling offers and stronger markets for their vessels. However, those operating in Bangladesh will continue to face challenges, with slow demand, reduced scrap prices, and financing difficulties impacting the overall market. Operators are advised to monitor steel demand trends closely and consider diversifying their vessel disposal strategies to take advantage of regional market variations.