GMS: Ship Recycling Faces Negative Pressures
The anticipated / ongoing seasonal slowdown in activity coupled with softening vessel prices has clearly started to characterize the year’s summer / monsoon mess across the Indian sub-continent ship recycling markets, reports cash buyer GMS.
“However, the 2024 version not only includes the incessant rains and a holiday-time for yard workers, but also ongoing global descent via boots on the ground warfare and an economic tumult that has double downed and unsustainably maintained negative pressures on prevailing macro-economic problems facing our world.”
GMS cites problems in Ukraine and the Middle East increasingly taking center stage. “Not only is Ukraine’s entry into NATO irreversible at this stage, but it will also bear witness to NATO Allied Forces (including the U.S.) ensuring the security for the State of Ukraine as per the terms of NATO’s agreement.
“Additionally, Israel’s recent strikes near Khan Younis that led to the unfortunate passing of scores of refugees, further threatens the delicacy of ongoing peace talks between the U.S. and the leaders of Hamas.
“As has been the case and will continue to be, retaliatory attacks by Houthis in the Red Sea lanes will keep further pressure on international logistics / freight rates on transiting merchant vessels that are destined into Med waters, further exasperating the current state of inflation.”
Local steel plate prices in India and Bangladesh have weakened in unison this week, and the U.S. dollar continued to dominate against recycling nation currencies as even though some were held in a weakened state, others suffered record declines this week. “Yet, on the back of no market units being on offer for a recycling sale, a marginal number of vessels surprisingly arrived the various waterfronts this week, including Pakistan, where a small LDT unit graced Gadani’s waterfront.”
There remains a serious shortage of recycling candidates, and GMS says the market is expected to remain quiet throughout much of Q3.
For week 28 of 2024, GMS demo rankings / pricings are: