Bright Outlook for Ship Recycling
2025 seems to have started on an optimistic note in the ship recycling markets, with a noticeable willingness to buy from various buyers across the Indian sub-continent, reports cash buyer GMS.
However, although the turn of the year seems to be bringing in a sprinkle of optimism, there remains little to be cheery about as key economic factors affecting the various ship recycling locations continue to wobble as a result of geopolitical turmoil and China’s economic fragility.
“News of several large LDT wet units (including those with questionable / sanctioned backgrounds) were seen making the rounds on the back of which, several VLCCs are reported to have been concluded over preceding week, to the few financially capable recyclers in both India and Bangladesh,” reports GMS.
Progress has been made in Bangladesh over the last year in upgrading facilities ahead of the Hong Kong Convention’s entry into force by the middle of this year. Four yards managed to obtain their HKC approvals with several more reportedly set to follow in the months ahead.
Prices have cooled off towards the end of 2024, and hope for an increased bullishness in recycling markets once the pro-business President Trump resumes office in January, remains hanging.
India finally announced tariffs on the economic damage that cheaper imported Chinese steel has done via undercutting domestic inventories in Alang (and even Gadani) across 2024, one that has seen a reflection in the performance of steel plate prices at these locations.
“This price cooling seems to inadvertently have brought Pakistan back into the picture as several end buyers are now raising enquiries on the marginally available units on offer, albeit at expectedly lower levels than their competitors.”
Turkey remains solidified in its economic predicaments, with no change reported this week.
“With supply expecting to increase going into the 2025 (and hopefully beyond), we may not see the deluge of vessels for a recycling sale just yet, as owners continue to reap the benefits of an extremely profitable last few years and take their older units right to the end of their trading lives.”
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