Bangladesh has strengthened its position in the ship recycling market in recent days, but yards are still facing a lack of available tonnage despite improved pricing conditions and better access to finance.
According to the latest commentary from GMS, recyclers in Chattogram have benefited from rising local steel plate prices and a stable dollar exchange rate, allowing them to increase their offers relative to competing buyers in Pakistan and India.
The bigger challenge, however, remains the limited supply of scrap candidates.
GMS noted that elevated day rates, driven by geopolitical disruption, are encouraging owners to hold on to vessels rather than sell them for recycling.
Letters of credit, which had constrained the market during the first quarter, are now becoming more readily available, while post-Eid approvals from the central bank are gaining momentum. Even so, two OFAC-sanctioned VLCCs remain outside port limits for a fourth consecutive week, and the arrival of ships with unclear documentation continues to hold back activity.
In India, meanwhile, disruption to LPG supplies at steel mills in Alang has eased only slightly. India remains the lowest-priced destination on the subcontinent, but GMS said this should not be read as a lack of interest or yard capacity. Rather, the market is being constrained by vessel availability and continued headaches around secure LPG supply routes via the Strait of Hormuz.
Pakistan, for its part, is seeing gradual progress on compliance. The first three recycling yards there are understood to have recently received Statements of Compliance, while the available pool of medium-sized dry bulk, LPG and offshore units continues to match Gadani’s capacity and improving standards.
India still holds a clear advantage in terms of compliance. Around 110 yards there meet Hong Kong Convention requirements, compared with about a dozen in Bangladesh.
In Turkey, Aliaga recyclers remain structurally uncompetitive for mainstream tonnage, though approved yards there continue to offer an important option for owners operating under Basel Convention requirements.
Indicative pricing from GMS shows Bangladeshi buyers still leading the market with offers of $490-495 per ldt for container ships, around $10 less for tankers and another $20 lower for bulk carriers. Pakistani buyers are roughly $15 behind across the board, with India a further $15 below that. In Turkey, indicative prices are around $290 for containers, $280 for tankers and $270 for bulk carriers.
