GMS: Push the Pause Button on Ship Recycling

The Middle East and global ship recycling markets need a serious push on the pause button, says cash buyer GMS, as this week the world has seen:

• increasing security bulletins surrounding an imminent Iranian / Hezbollah threat against Israel,

• the U.S. repositioning two aircraft carrier / destroyer fleets off the Gulf of Oman & Eastern Mediterranean leaving the entire region on high alert,

• PM Sheikh Hassina abruptly resign as Prime Minister of Bangladesh and fled to India in a government helicopter,

• Indian steel prices nosedive into the nether, all ship recycling nation currencies devalue in unison against the U.S. dollar again, and finally,

• witness the top placed ship recycling destination in the world i.e. Pakistan, report no fresh arrivals at its waterfront and have nothing to show for their firmer levels.

This is the tragic reality of ship recycling in 2024 today, says GMS. “It’s safe to say the world is in need of a serious break before a modicum of stability can return, not only for the sake of global peace but also for ship recycling so that our industry has a chance to revive its confidence and offer meaningful levels on fresh tonnage once again.”

Ever since the unexpected results of India’s recently concluded general elections, local steel plate prices have collapsed by nearly USD 60/ton and reported even further declines this week that have now left most Alang offers on dry bulk units, firmly below USD 500/LDT and only slightly above USD 500/LDT on container ships.

“Indeed, demand and pricing from Alang have been on an entirely new level of disappointment for over six weeks now, despite an overall positive (for the nation) budget that has done little to disperse India’s gloomy ship recycling clouds. Making matters worse, with an additional four Hong Kong Convention (HKC) compliant yards now recognized in Bangladesh, any of the slim pickings of HKC units that may come available could also be diverted away from Alang, despite an increasing number of Indian yards lying dormant over this summer / monsoon.”

For week 32 of 2024, GMS demo rankings / pricings are: