The subcontinent ship recycling market continues to touch newer highs every day with very few vessels being offered for recycling. With the domestic steel demand in India increasing at an unprecedented rate, the end buyers are well positioned to compete with buyers from Pakistan, where prices are still range bound. Bangladesh is leading the price board owing to the resumption of construction activities and supportive finished steel prices.
In order to increase the recycling capacity worldwide and upgrade recycling facilities outside the OECD for a more sustainable ship recycling, the European Commission appears to be seeking a solution to the deadlock that has prevented Indian yards from being included in the EU's list of approved yards. A big question still remains as to how long it will take!
Oil powered towards a seventh straight weekly gain as WTI hits USD 91 per barrel driven by combination of factors such as supply disruption due to freezing weather, rise in demand due to easing of travel restrictions and rising geopolitical tensions. The jump will fan inflationary pressures, squeezing consumers and alarming politicians concerned about the fast-rising living costs.
The European Central Bank on Thursday kept to its cautious approach and retained easing monetary policy by leaving interest rates unchanged despite record high inflation.
The end buyers from Alang are pressing for tonnage and giving competitive offers backed by healthy domestic demand. Prices are consistently increasing by up to USD 15/LDT week on week and now match those offered by their counterparts in Gadani.
Union Budget 2022-23 has extended the customs duty exemption on imports of Melting Scrap (Iron, steel, and stainless steel) for another year till 31st March 2023.
Anti-Dumping duty is being permanently revoked on Flat rolled product of steel, plated, or coated with alloy of Aluminium or Zinc, originating in, or exported from China, Vietnam, and South Korea in an effort to stabilize metal prices.
The market is continuing its momentum week on week and riding high on the growing demand for steel and ferrous scrap. With very few units available in the market, the prices are expected to remain steady as the inventories in the yards need to be replenished to meet the rising demand.
At these price levels, the demand for mid-sized tonnage remains very high whereas the large tonnage is not getting many offers due to the attached risk of price fluctuations.
The ferrous scrap import market may remain positive as construction activity and steel prices resume.
The offers from end buyers of Gadani have slightly improved since last week as the end buyers realize that the price is likely to remain at higher levels for some time yet and to secure tonnage, they need to be competitive with their neighboring markets.
The imported scrap prices improved by about USD 5-10/MT and is expected to pick up further as the weather is gradually getting suitable for resumption of construction activities.
The International Monetary Fund has approved the completion of the sixth review of its stalled USD 6 billion programme for Pakistan, paving the way for an immediate disbursement of about USD 1 billion loan tranche for the cash-strapped country. Soon after this announcement, the PKR gained some strength and is currently trading at PKR 174.39/USD.
Imported scrap prices have risen by about USD 20/MT this week, and mills are expected to replenish their inventories, which may lead to further improvement in import scrap trade.
Turkey's annual inflation surged to 48.69% in January amid the country's interest rate cuts and currency turmoil. The currency crash caused the price of essential goods, food, and utilities to rise, putting household living standards at risk. To address some of the concerns, the Turkish government has increased the 2022 minimum wage for millions of workers by a whopping 50 percent.
Turkish Lira maintained its stability this week and is currently trading at TL 13.57/USD.