Ship Recycling Market Already Looking Towards 2024


Source: Clarkson Platou Hellas
Meanwhile, Allied Shipbroking said in its latest weekly report, that “low sentiment prevailed for yet another week, with the usual factors at play across the Indian Sub-continent. The Turkish market has remained somewhat stable but remains in a position of weakness. While charter markets across the dry and tanker markets remain strong, we can expect the lack of tonnage to persist. Even container sales, which have been the most positive market over recent months, could suffer if vessels continue to divert around the Suez Canal, a move which could lift container vessel earnings towards more average levels.

Source: Allied
The consequences of the UAE SRR as it stands look quite severe for the major recycling countries, including Turkey. It bans the use of beaching, affecting the Indian Sub-continent, and landing, affecting Turkey. It will be interesting to see how this affects the number of vessels operating under the UAE flag and the number of ‘as is UAE’ sales, such as the sale of the general cargo vessel ‘Star-1’ reported as sold on an as is UAE basis this week”, the shipbroker noted.
In a separate weekly report, Best Oasis (www.best-oasis.com), one of the world’s leading buyer of ships said that “the United Arab Emirates (UAE) has recently introduced a comprehensive set of regulations about ship recycling. These regulations explicitly prohibit the use of “beaching” and “landing” methods, which are commonly employed by ship recyclers in the Indian subcontinent and Turkey. Additionally, the UAE prohibits the utilization of its waters as a temporary layover for vessels en route to demolition sites on the shores. At present, this regulation is being implemented at the time when numerous Indian subcontinent ship recycling yards which have already obtained Hong Kong Convention (HKC) certification and have made significant investments in their infrastructure with the intent of being included in the European Union (EU) list, are affected by this regulation. This appears to be a major blow for such establishments, as it will have a substantial impact on the forward momentum of this industry.

Source: Best Oasis
Throughout this week, the ship recycling sector in India experienced significant fluctuations, characterized by intermittent increases followed by subsequent declines. Overall, the sentiment remained primarily low. Additionally, the local steel market in India has been grappling with a notable reduction in demand. In Bangladesh, the market has experienced a lack of activity and a slowdown, resulting in no sales and significant challenges related to LC. Similarly, Pakistan is also struggling with LC issues, which can be attributed to the ongoing economic difficulties the country has been facing. In contrast to previous weeks, Turkiye’s performance has exhibited stability in the current week, without any significant improvements. The International Energy Agency (IEA) indicated that global oil demand is projected to increase at a faster rate than previously anticipated in the coming year. This indicates that the short-term prospects for oil consumption remain strong. The IEA has stated in its monthly report that global consumption is projected to increase by 1.1 million barrels per day (bpd) in 2024. This is an upward revision of 130,000 bpd from the previous forecast, attributed to a more positive outlook for the United States and a decrease in oil prices”, Best Oasis said.
Nikos Roussanoglou, Hellenic Shipping News Worldwide