Ship Recycling Market Still Plagued By Lack of Available Tonnage

A lack of tonnage and sluggish activity throughout, has continued to be the norm in the ship recycling market over the past week, although there has been a slight shift of momentum in some markets. In its latest weekly report, Best Oasis (www.best-oasis.com), one of the leading global cash buyers of ships, said that “this week, there has been a slight improvement in the ship recycling industry in India. However, the demand is still lacking, leading to a state of confusion and uncertainty about how long this situation will persist. Bangladesh is currently facing a slow pace in its market, with only a limited number of buyers seeking to acquire tonnage. The lack of financing facilities and a less aggressive market have contributed to this situation. Pakistan is currently in a state of observation, proceeding cautiously. The upcoming elections are eagerly anticipated, as they will determine the future course of events”, Best Oasis said.

“In contrast, Turkey experienced no changes in its local market and a marginal uptick in imports, accompanied by a rising demand. The revised World Economic Outlook, published by the IMF, detailed an increase in the projected global economic growth rate for 2024 from 2.9% to 3.1%. Growth remained below the historical average of 3.8%, according to the IMF, due to elevated interest rates and sluggish productivity growth. The global economy is currently undergoing the last phase of decline toward a gentle landing, demonstrating an extraordinary degree of resilience. UNCTAD (United Nations Conference on Trade and Development) has expressed concern about the current global trade disruptions occurring in the regions spanning from the Red Sea to the Black Sea and the Panama Canal. It cautioned that the increasing frequency of attacks on vessels in the Red Sea, together with political tensions impacting commerce in the Black Sea and the consequences of climate change on the Panama Canal, have led to a multifaceted difficulty that is impacting crucial trade routes”, Best Oasis noted.

According to Best Oasis, in India, “the market has seen a slight improvement, although the demand is still lacking. It is evident that the current state appears confusing and the duration of this state remains uncertain. In the most recent Union budget released on February 1st, there were no revisions or modifications to the tax, customs, or GST. However, infrastructure capital expenditures have increased by 11.1%. This is anticipated to result in a strong domestic demand for steel, which will in turn stimulate private investments and facilitate the generation of employment opportunities. The emphasis on constructing physical, social, and digital infrastructure at an unprecedented rate is encouraging. This is an indicator of what the July budget will consist of”, Best Oasis concluded.

Meanwhile, in a separate report, shipbroker Clarkson Platou Hellas said that “the sluggish market remains with the dearth of tonnage continuing, and the Indian recycling industry particularly in the doldrums with slim demand from the steel mills for ship steel. Some serious question marks are being raised from Alang with many of the rerolling mills closing and very little appetite for the recyclers to procure tonnage at this current time. Maybe the Indian election in April, will provide some much-needed stimulus to the industry and hopefully kickstart sentiment again! Elsewhere, there is some increased interest from the Pakistani recyclers as the complete opposite to India is being reported. There is strong demand to purchase ships/steel in Karachi and they now look set to be the likely destination for any available candidate that is not requiring green recycling. Rumours suggest the financing restrictions are slowly easing”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide