Ship Recyclers Caught in “Eerie Calm”
Cash buyer GMS reports an eerie calm has descended across tense global economies, including the destitute ship recycling sector.
It’s been some time since a regular supply of a decent variety of vessels has been regularly available (likely the worst in a decade), says GMS.
Levels have declined by over USD 100/LDT since the peaks of early 2024 and offerings continually retreat, firmly relegating all vessels below the commensurate USD 500/LDT mark.
Geopolitical events have been to blame for much of the trauma across the ship recycling markets this year. “Such has been the unpredictable nature of global instability at present that sentiments are yoyoing wildly from one week to the next.”
Bangladesh has remained virtually out of the picture for over a couple of weeks, given that most infrastructure projects remain on hold under the current interim government.
India has managed to haul in a massive tranche of tonnage, but ship recycling yards across Bangladesh and (especially) Pakistan lie empty due to comparatively weak sentiments that have left demand stifled.
As cheaper Chinese steel continues to flood the markets and has been a key source of frustration for Indian and Pakistani recyclers in recent times, meaningful tariffs have done little to stabilize local steel plate prices at these destinations, which are either under the floor or crawling on it.
The “other” fundamental, the U.S. Dollar resumed its untoward advances against competing ship recycling nation currencies, as all ship recycling destinations reported depreciations of varying degrees this week.
“Overall, the interim, while tense and on edge, leaves the industry with a forecast that is one of certain economic pressures waiting to be delivered across Q4 and even into Q5, marking a feared eighth year resurgence of terrible times across the ship recycling industry (and the world at large), given that we have now witnessed economies tumble on an eight-year cycle i.e. 2007 - 2008 / 2015 - 2016 / 2023 – 2024.”
There being a noticeable cooling in the dry bulk sector of late, as freight rates remain firm across the board and there are not too many candidates expected to head for recycling through the rest of the year.
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