Ship Recycling Market Impacted by Middle East Situation

Bangladeshi and Pakistani markets have been making noticeable improvements over recent weeks, but there remains an ongoing shortage in the global availability of ‘market’ tonnage for ship recycling, reports cash buyer GMS.

As evident from the number of arrivals and beachings this week, an increasing number of ship recyclers have clearly managed to and are reportedly still in the process of obtaining further approvals on L/Cs from their respective banks. “As a result, there is now a noticeable disparity in offers emanating from recyclers from the same sub-continent destination,” says GMS.

Steel plate prices are stabilizing and even making noteworthy improvements (for e.g. the recent USD 50/Ton jump in Bangladeshi plate prices), and sub-continent currencies continuing to find stable footing and even registering improvements this week.

However, there remains a limited number of aggressive end buyers who have been actively concluding the number of small LDT, private tonnage that is seemingly on offer week-after-week – a volume that is not only insufficient in sustaining the needs of ship recyclers the world over, but it is also a volume that is continually and increasingly affected by the ongoing war in the Middle East.

Geopolitical concerns have resulted in freight rates remaining unseasonably high, and this continues to stifle the number of vessels that are potential recycling candidates.

This trend is likely to persist as the industry approaches the traditionally quieter Chinese New Year holidays, leaving an underwhelming Q1 2024 for the global ship recycling markets and potential vessel volumes to come.

For week 5 of 2024, GMS demo rankings / pricing for the week are: