Ship Recycling Markets Looking for More Growth

The ship recycling markets have shown a mixed picture during the past week. In its latest weekly report, Best Oasis (www.best-oasis.com ), a leading cash buyer of ships said that “in the ship recycling markets across four key destinations, distinct trends are observed. In India, the market shows positive momentum with stable rates, and prevailing conditions suggest continued market favorability, assuming stable supply levels and no major geopolitical disruptions. Bangladesh’s market has reactivated post-Eid holidays, experiencing a slight increase in activity and a rise in inquiries, with clearer market trends expected to emerge next week”.

Best Oasis added that “contrarily, Pakistan’s recycling market remains quieter, with lower offers from recyclers compared to other subcontinental regions. Meanwhile, in Turkiye, the market maintains stability with an increase in container supply, which may influence future pricing and demand dynamics in the recycling sector. The European Union, alongside the U.K., U.S., and Canada, has announced a series of tightened sanctions on Iran in response to its recent attack on Israel. These coordinated sanctions specifically target Iran’s drone and missile industries, focusing on individuals and companies integral to Iran’s drone production.

This move represents a unified Western response to Iran’s aggressive actions. The global economy is projected to grow at a steady rate of 3.2% through 2024 and 2025, matching the pace set in 2023, according to the IMF’s latest World Economic Outlook. While advanced economies are expected to experience a slight acceleration in growth—from 1.6% in 2023 to 1.8% by 2025—this will be balanced by a modest deceleration in emerging markets and developing economies, which will see growth decrease from 4.3% in 2023 to 4.2% in the following years. The long-term global growth forecast stands at 3.1%, marking the lowest in decades. Meanwhile, global inflation is anticipated to decrease from 6.8% in 2023 to 4.5% by 2025, with advanced economies likely achieving their inflation targets before their emerging and developing counterparts. Core inflation is expected to decline more slowly over the period”, Best Oasis concluded.

In a separate note, shipbroker Banchero Costa said that “a quieter week across the Subcontinent in terms of interesting sales, but strong demand remains across the three main markets. Interestingly Indian recyclers which year to date have been solely focused on tonnage for HKC complaint recycling have in recent weeks become more aggressive on market units creating a rare competitive environment. In terms of pricing it remains hard to gauge where exactly the market is, with a lot of recent sales being on a “as is , where is” basis on sub-par vintage tonnage which has a limited audience. While it is clear that the $600 LT/LDT is likely not to be breached again too easily, it would be interesting to see what levels a standard Handymax size bulk carrier (approx. 10,000 LDT) basis a Subcontinent delivery range could achieve in the present climate”, Banchero Costa concluded.

Nikos Roussanoglou, Hellenic Shipping News Worldwide