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Week 40 - Ship Recycling Report - Best Oasis

1st October 2021 to 8th October 2021

GLOBAL SHIP
RECYCLING MARKETS

Highlights of the Week

The macroeconomic barometer indicates that the global demand for steel is going to remain buoyant as the key end-use markets of finished steel especially the construction and manufacturing sector are ascending. Even though the subcontinent recycling market has not seen any significant improvement in price and activity since past few weeks, prices are expected to remain range bound due to the prevailing scarcity of tonnage in the demolition market.

The world is facing an energy crunch as the supply of natural gas, coal and other energy sources fails to adequately satisfy demand. Global supply chain has crumbled with a sudden increase witnessed in the consumer demand whereas the production disruptions caused by the pandemic have failed to bounce back in the same pace.

Oil prices are climbing around the world and the current price trajectory is the result of supply moderating while the demand heads skyward. The reopening of the global economy is sending up the oil demand whereas the OPEC isn't raising supply significantly, in a bid to keep prices at profitable levels.

There is some optimism in the Crude Carrier market with the rising demand for oil as it may translate into a stronger freight market for the Tanker segment which has suffered a ravaging phase since the beginning of the pandemic.

INDIA

   Tanker:  

580

 USD 

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   container:   

600

 USD 

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   BULKER:   

565

 USD 

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LOW

MODERATE

HIGH

N/A = NOT AVAILABLE

Coal shortage leading to rise in Steel prices

Among the major three subcontinent recycling markets, India is showing a promising demand outlook especially for small and mid-sized units whereas there are not many takers for bigger tonnage due to the existing volatility in global commodity prices. There has been rising number of inquiries for available candidates backed by the stable demand for ship plates in the local market.

Domestic steel prices are expected to rise further due to coal shortage throughout the country. One month earlier, coal used to be in the range of USD 55-80/MT whereas it has now climbed to the range of USD 120-160/MT, leading to a significant production cut in the steel mills.

BANGLADESH

   Tanker:  

600

 USD 

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   container:   

620

 USD 

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   BULKER:   

590

 USD 

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LOW

MODERATE

HIGH

N/A = NOT AVAILABLE

Demand curve remains flat

The hike in import scrap prices due to increased freight rates and local demand may get reflected in the ship plate prices as well. Currently the sentiments of ship recyclers remain dampened in Bangladesh with no upturn in the offer prices.

The volatility in global commodity prices is having a major impact on all industries of Bangladesh as the country relies heavily on imports to cater both for local and export markets. The factories are nervous to place advance orders as they are unsure about the price levels when the payments will be due for the orders.

Imported scrap prices have seen an increase of about USD 15/MT this week.

PAKISTAN

   Tanker:  

600

 USD 

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   container:   

615

 USD 

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   BULKER:   

590

 USD 

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LOW

MODERATE

HIGH

N/A = NOT AVAILABLE

Ship Plate prices remain stable

The operations in the recycling yards of Gadani are being affected due to sharp rise in prices of oxygen gas due to shortage of oxygen which many believe is a sham. According to some sources, the gas supply companies have formed a cartel and created artificial shortage to escalate the prices.

The demand for tonnage has remained stable with no notable improvement in offer prices.

Steel Mills may have to increase Rebar prices soon due to the recent hike in scrap prices. The weakening of Pakistani rupee against US Dollar has a direct impact on scrap prices as the importers have to make payment in USD.

The PKR which was trading at 152.28 in May this year has lost a significant value within few months adding a massive burden on the nation’s foreign debt. It is currently trading at PKR 170.92/ USD.

TURKEY

   Tanker:  

330

 USD 

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   container:   

340

 USD 

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   BULKER:   

320

 USD 

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LOW

MODERATE

HIGH

N/A = NOT AVAILABLE

Imported scrap prices climb on strengthened demand

The imported scrap prices have jumped up by USD 15/MT this week backed by strong demand while the domestic scrap prices remained stable. Steel billet prices are moving upwards in response to rising scrap and energy costs.

Turkish Lira slides to a record low this week touching 8.97 on concerns over monetary policy credibility as well as firmer dollar. It is currently trading at TL 8.93/USD. Turkey’s steel industry now stands as the No.1 exporting sector in the country after the export data of September have been released. The industry is growing by diversifying its export markets.

Turkey has exhausted its Q-4 European Union quota for Rebar and Wire Rod imports in the first two days of quarter beginning.