Challenging Conditions in the Ship Recycling Market

Conditions in the various ship recycling markets have been quite challenging over the past week. In its latest weekly report, Best Oasis (www.best-oasis.com), a leading cash buyer of ships said that “the four key ship recycling destinations are currently facing various challenges and market conditions. In India, the local market remains unfavorable and negative, with no demand for steel from vessels and a daily decline in the local steel market. In Bangladesh, the market is currently closed due to the Eid holidays when workers return to their homes, and the market trend will become clearer in the weeks ahead. Similarly, in Pakistan, the market is closed for Eid holidays, with a clearer understanding of the market trajectory expected in the following weeks. In Türkiye, the market is experiencing minimal price movement and very slow activity due to the holiday week”.

Best Oasis added that “global growth forecasts for 2024 have been upgraded, reflecting increased confidence in Europe’s recovery, a rebound in China’s export potential, and stronger domestic demand in emerging markets, excluding China. The global growth forecast for 2024 has been raised to 2.6% from 2.4% in the March review. The eurozone’s growth forecast has been revised up by 0.2 percentage points to 0.8%, and China’s forecast has been adjusted to 4.8% from 4.5%. The US GDP growth forecast remains unchanged at 2.1% for the current year. However, for 2025, the analysis anticipates a slowdown in global economic growth to 2.4%, with US growth decelerating to 1.5% and the eurozone’s growth accelerating to 1.5%. China’s growth is expected to decline to 4.5% due to a slowdown in exports and government spending”, Best Oasis concluded.

In a separate report this week, shipbroker Banchero Costa said that it was “a quieter week across all the SubContinent market, as holidays are replaced by monsoon rains. That said, India / Alang remained the go to market for both HKC and non HKC tonnage. As Bangladesh local market remained lacklustre, the recent budget announcements not helping to boost sentiment either with taxes on in coming scrap vessels that are carrying excess quantities of FO & LO on board, which will have a knock on effect to Cash Buyers and therefore the Owners, who previously could expect to receive a useful premium on any meaningful additional bunkers on board at the time of delivery.

A couples of sales to report which perhaps suggested a slightly negative sentiment, the 1986 built reefer TROPICAL SKY (5,175 LDT) at $555/LT LDT, and another MSC vessel again for HKC only recycling, the MSC GRACE F has also been sold at $545/LT LDT to Indian. It is worth to note the sale was considerably lower to the recent reported sale of the MSC JEMIMA at $570LT / LDT”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide