Wirana Shipping has highlighted improving steel demand in India as a positive signal for the country's ship recycling sector, while Bangladesh continues to grapple with sluggish demand and financing difficulties. The Indian subcontinent — comprising India, Bangladesh, and Pakistan — accounts for the majority of global ship recycling by tonnage, meaning divergences between these neighboring markets can significantly influence where vessel owners choose to send end-of-life ships.

According to the latest Market Outlook from Wirana Shipping Corporation, India has now recorded a second consecutive week of strengthening steel demand. Local steel plate prices rose by USD 4/MT, while semis and finished steel products climbed USD 2–4/MT and imported scrap increased by USD 1/MT. Although recycler offers held steady, Wirana Shipping anticipates that prices could improve in the coming weeks if the upward trend in steel demand persists. Ship recycling is closely tied to domestic steel markets because demolished vessels yield steel plate and scrap that feed directly into local production supply chains.

Foreign-exchange inflows totaling USD 41 billion, resulting from central-bank measures introduced in June, have also contributed to a marginal strengthening of the local currency, even amid higher oil prices.

In Bangladesh, recycler offers weakened as domestic steel demand remained muted. Local steel plate and scrap prices rose by USD 4/MT and USD 2/MT respectively, but imported shredded scrap declined by USD 5/MT and imported scrap fell by USD 4/MT. Recyclers are broadly seeking to reduce offers for recycling candidates by approximately USD 10–15/LT LDT. Compounding the pressure, some importers are reportedly facing difficulties opening Letters of Credit — the trade finance instruments that Bangladeshi recyclers rely on to purchase vessels from international sellers. Wirana Shipping expects recycler prices in Bangladesh to remain under strain.

The flow of new recycling candidates continues to be slow, with most vessels coming from the dry bulk segment. Pakistan and Turkey remained broadly stable over the week, and overall recycling tonnage supply is projected to stay slow to moderate.

Hitesh Vyas, Vice President Middle East and Green Recycling Coordinator at Wirana Shipping, said: "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. With relatively few recycling candidates available, local market conditions will continue to have a significant influence on pricing. There are, however, encouraging signs in India and, if steel demand continues to strengthen, we expect recycler prices there to improve in the coming weeks."

Source: Wirana Shipping Corporation via Hellenic Shipping News