India’s Recycling Market Gains Momentum

Wirana Shipping has identified improving steel demand in India as an encouraging sign for the country’s ship recycling market, while slower demand and financing pressures continue to weigh on Bangladesh.

The latest Market Outlook reports a second consecutive week of improving steel demand in India. Local steel plate prices increased by $4/MT, semis and finished steel products by $2–4/MT and imported scrap by $1/MT. Recycler offers remained unchanged, although Wirana Shipping expects prices to improve in the coming weeks if stronger steel demand continues.

Foreign-exchange inflows totaling $41 billion following central-bank measures introduced in June have also helped the local currency strengthen marginally despite higher oil prices.

In Bangladesh, recycler offers softened as domestic steel demand remained slow. Local steel plate and scrap prices increased by $4/MT and $2/MT respectively, while imported shredded scrap fell by $5/MT and imported scrap by $4/MT. Recyclers are generally looking to reduce offers for recycling candidates by around $10–15/LT LDT. Some importers are also experiencing difficulties opening Letters of Credit, adding further pressure to the market. Wirana Shipping expects recycler prices in Bangladesh to remain under pressure.

The circulation of new recycling candidates remains slow, with vessels mainly coming from the dry segment. Pakistan and Turkey remained broadly stable during the week, while overall recycling tonnage supply is expected to remain slow to moderate.

Hitesh Vyas, Vice President Middle East and Green Recycling Coordinator, 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.”