Ship Recycling Fundamentals Seesaw
Cash buyer GMS cites the dangerous situations unfolding across the Middle East, Ukraine and South China Sea, when saying that politics, war, and ensuing global financial instability, means that ship recycling markets continue to endure profound challenges as the industry heads towards Q4 2024.
“On the financial side, we witnessed a seesawing of fundamentals as on the one hand, likely on the back of news that the U.S. Feds are revising another reduction in interest rates, the U.S. Dollar seemed to have declined a hair or stayed even across the board, and offer Indian sub-continent and Turkish currencies a much-needed opportunity to stabilize this week.
“On the other hand, local steel plate prices in both India and Pakistan suffered tragic declines, all at a time their +USD 500/LDT levels were the only things keeping shipowners / cash buyers interested in these recycling destinations.”
Even in the West, Turkish steel registered falls through late August at a time where local levels were their only safety net and are now collapsing under the feet of local recyclers, says GMS. These declining steel levels have also shown few signs of easing in India and Pakistan where Gadani recyclers refuse to be a competitive resale option for no reason other than they can, and Bangladesh continues to dance to several soundtracks at the same time.
What’s the bright side? None!
“The availability of candidates remains abysmal because of world affairs, and this continues choking out the possibility of determining where the new recycling lows lie, which themselves are changing every week.”
As a result, ship recycling markets themselves need to find some sort of floor / stability before even offering afresh on any units, thereby driving themselves to a complete standstill. Any candidates that do come for sale are met with comical numbers, as recyclers choose to wait and see where prices finally settle before returning to their snooze cruise again amidst a historically firmer time that is doing the opposite in 2024.
GMS demo rankings / pricing for week 37 of 2024 are: