Lack of Tonnage Plaguing the Ship Recycling Market


Source: Best Oasis
Meanwhile, in a separate report this week, shipbroker Intermodal said that “the demolition market remained subdued this past week, impacted by strong freight rates that continue to limit the availability of vessels for recycling. In India, the steel market continued to decline, with local steel plate and scrap prices dropping further. The ongoing monsoon season exacerbated these declines, leading ship recyclers to reduce their offers due to weak demand.

Source: Intermodal
The market is now awaiting the upcoming national budget announcement, which is hoped to bring some positive news, but current conditions show a lack of demand recovery. Bangladesh faced mixed conditions, with minor improvements in local steel prices offset by reductions in scrap prices. The country also dealt with significant disruptions due to ongoing riots protesting government job reservations, which negatively impacted market activities. The unrest, coupled with difficulties in obtaining Letters of Credit, kept recycler interest low and market conditions challenging”.
Meanwhile, Intermodal added that “Pakistan’s market remained largely unchanged, with the local steel market stable but inactive. The introduction of new taxes on imports and the monsoon season slowed down construction activities, further affecting demand. However, the recent IMF loan agreement provided some economic stability, though it has yet to translate into increased market activity. Turkey’s market maintained stability but faced low activity levels. The local steel market remained steady, but demand for scrap was weak. Inflation showed signs of stabilizing, but the local currency’s continued weakness against the US dollar added to the challenges. The supply of ships for recycling was critically low, reflecting broader regional trends. Overall, the outlook for the demolition market remains cautious. The supply of fresh tonnages is expected to remain limited in the short term. Stakeholders are closely monitoring upcoming economic policies and budget announcements, particularly in India, which could introduce changes positively affecting market conditions”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide