India's ship scrap market is hit hard by cheap Chinese steel slabs

    VOLATILE currency movements and crashing steel prices have hit prices on offer for scrap ships in India, which also compete with cheap steel from China.

　　Ship demolition markets in Pakistan and Bangladesh are proving more resilient than India's, where prices continue to fall.

　　At the bottom end of the spectrum, rates for dry vessels slid as far as US$430 per light displacement ton (ldt) in India, while the highest prices on offer for tankers barely scratched $470 per ldt in Bangladesh, according to brokers and cash buyers, reported Lloyd's List.

　　"With values wiped off by as much as 15 per cent in India most end buyers are struggling to justify the high priced purchases of this year and are laying low on offers for new vessels," said US-based cash buyer GMS.

　　"It may likely be some time before any sort of recovery is seen, unless governments across the subcontinent rally urgently and place increased duties on the Chinese steel flooding the markets."

　　Greek broker Allied Shipbroking estimates that 842 ships totalling 30.7 million dead weight tonnes have been sold for demolition so far this year, compared with 994 vessels amounting to 44.8 million dwt in 2013.

　　Bangladesh, which has been less impacted by Chinese steel imports than its neighbours, is currently the best option for owners looking to sell ships for scrap.

　　Recent deals included the 1981-built, 5,949 ldt ro-ro passenger vessel Princess of the South, operated by Philippine Span Asia Carrier and reported sold for delivery to Bangladesh at $470 per ldt, or $2.8 million.

　　Rates in Pakistan were also holding up and breakers there continue to lobby the government to impose higher duties on Chinese steel imports.

　　In the only recent sale into that market, the 1994-built, 22,257 ldt suezmax tanker Gandhar, operated by the Shipping Corporation of India, was reported sold for delivery to Gadani at $445 per ldt, or $9.9 million.

　　In India, where sentiment took a sharp knock, there were few sales to report despite ample capacity in yards in Alang in Gujarat state.