Source: Internet
Shipping industry news, as the rainy season approaches, the pace of demolition operations in India and other mainstream shipbreaking markets has slowed down.
Leading ship buyer Best Oasis stated in its latest weekly report: “The Indian market remained sluggish this week, with transaction volumes for all ship types continuing to decline, demolition quotes falling across the board, and overall market sentiment weak. The short-term market outlook is not optimistic; the arrival of the rainy season will further drag down shipyard operational efficiency, a seasonal factor that has historically significantly reduced demolition transaction volumes during the same period. The escalating geopolitical conflicts in key shipping lanes are increasing market uncertainty, which may affect the supply of vessels destined for demolition and transaction volumes flowing into the South Asian subcontinent. The competitiveness of Indian demolition quotes continues to decline, and there is a risk of market share being squeezed by Pakistan. If the current market environment remains unchanged, this trend may continue.”
Best Oasis analyzed the Bangladesh market: “The core focus of the market this week is the national budget report for fiscal years 2026 to 2027. Industry practitioners are scrutinizing policy details clause by clause, assessing the impact of new regulations on the shipbreaking business. Preliminary information indicates that import duties will be increased by 300 Taka (approximately 2.4 USD), and the industry is still calculating the subsequent knock-on effects.
Despite the uncertainty in budget policy, sentiment in the Chittagong market remains positive. Local shipbreakers are still actively acquiring vessels for demolition at competitive prices. The Pakistani shipbreaking market is firm, with strong demand across all ship types and stable demolition quotes. All shipbreaking companies are actively seeking vessels, and market acquisition willingness is strong. Due to the ongoing conflict with Iran, the supply of domestic steel plates and scrap steel sources is disrupted, tightening steel supply. The Turkish market is generally stable but slightly weaker, with light trading recently and quotes showing no significant fluctuation for several weeks; buyers are only focusing on large vessels, with almost no interest in small ones. Capacity at European shipbreaking yards is near saturation, supporting stable regional demolition quotes. Compared to the South Asian subcontinent, Turkish quotes have long been at a disadvantage. Unless there are special regulations or strict environmental requirements, shipowners prefer to send vessels to South Asia for demolition.”
Meanwhile, shipbroker Intermodal noted in another report: “Due to the approaching rainy season in the Indian subcontinent, sentiment in major South Asian shipbreaking hubs is turning cautious. The rainy season climate can disrupt shipyard operations and reduce efficiency; market participants are also closely monitoring developments in the Middle East situation. If a peace agreement is reached and trade flows return to normal, it could reverse the current sluggish market. South Asian countries are highly dependent on Gulf energy exports; lower energy prices can ease economic pressures in various countries. Falling fuel costs and narrowing geopolitical risk premiums leading to lower freight rates could indirectly boost demolition demand. The Indian market remains quiet, and transaction volumes may shrink further during the rainy season; the domestic steel market fundamentals are weak, with sluggish demand and falling steel prices continuing to compress steel mill profit margins.”
At the macro level, the Indian government has introduced a daily diesel purchase quota policy to alleviate energy supply pressure and control import spending. However, if a peace agreement is reached in the Middle East and shipping through the Strait of Hormuz resumes smoothly, India would benefit significantly: lower energy prices could substantially reduce external cost burdens.
The Chittagong market in Bangladesh performed well this week. Even during the rainy season, there is sufficient supply of vessels for demolition, and the acquisition enthusiasm of breakers remains unabated. Tight liquidity in the steel market continues to suppress market confidence, but steel plate prices remain stable for now; the latest national budget proposal includes a 19% increase in public fiscal spending, which is expected to boost overall demand and inject positive momentum into the economy.
Within the South Asian region, the Pakistani shipbreaking market shows stronger overall resilience: competitive demolition quotes, stable Rupee exchange rate resilience, and a relatively low supply of vessels for demolition are multiple factors supporting the market. However, sluggish steel demand and conservative procurement by steel mills continue to limit the overall scale of demolition transactions. Tax cuts introduced in the national budget may bring indirect benefits to the industry; but persistent economic downward pressure and high inflation continue to weigh on market expectations.
