End of Tumultuous Year for Ship Recyclers

As a year of economic turmoil winds down on a quiet note, the world anticipates a 2025 that is bearing all the signs of a comparatively busier period across all sectors, says cash buyer GMS.

The supply of tonnage has seen a year of record low recycling volumes, and yards are certainly yearning for busier days ahead, as freight markets increasingly start to divert more candidates for recycling, after a year of glorious charter rates across all sectors.

Recycling prices have declined over the course of the year, from a high of USD 600/LDT during Q1, down to USD 450s/LDT come Q4 2025. This has kept most recycling yards suspended in a state of limbo as a permanent shut down would be far more expensive than a temporary operational closure.

“For week 52 however, it was a different story as not only did global trade ease this week, but economies also took a breather against the raging US dollar as well, as most ship recycling nation currencies seemed to irrationally display the same amount of instability this week, resulting in a quieter port position in both India and Bangladesh.”

Local steel plate prices have been through the worst of times falling over USD 150/Ton from the highs seen earlier in the year, until the close of this week where both Indian and Pakistani steel plate prices reported further declines whilst Bangladesh and China flatlined this week.

Despite apparently performing off the charts for a majority of the year, the Baltic Dry Exchange Dry Bulk Index slid so rapidly over Q4 2024 that it recorded an overall 52.5% annual decline, the worst since 2014. Sectors such as Capesize index fell 66.7%, Panamax index fell 48.7%, and even Supramaxes saw a 32% decline across the year.

“While the wet sector continues to sprinkle its share of tonnage after quite a hiatus, the supply of recycling vessels heading into 2025 is certainly gearing up for a seeming uptick,” says GMS. The overall declining Baltic Exchange also saw oil prices relaxing around the USD 70.6 / barrel for the week as well, as non-OPEC+ countries are expected to drive up output despite the dithering Chinese demand, where China today is the largest importer of oil in the world.  

2025 could see Pakistan and Bangladesh ramp up yard upgrades to Hong Kong Convention standards ahead of its entry into force from the middle of next year.

GMS demo rankings / pricing for week 52 of 2024 are: