As 2024 closes, the global maritime sector braces for a more dynamic 2025, according to GMS. Despite strong charter rates across sectors, ship recycling volumes reached record lows. Here’s a detailed look at the year’s trends and what lies ahead:
Recycling Market Overview
- Price Decline: Ship recycling prices fell significantly, from USD 600/LDT in Q1 to USD 450s/LDT by Q4 2024, leaving recycling yards struggling to maintain operations.
- Steel Price Fluctuations:
- Steel plate prices in India and Pakistan declined sharply by over USD 150/ton, while prices in Bangladesh and China remained stable by year-end.
Freight Markets and Baltic Dry Index
- The Baltic Dry Index (BDI) experienced a 52.5% annual decline, the worst since 2014, reflecting weak performance in dry bulk sectors:
- Capesize Index: Fell by 66.7%.
- Panamax Index: Dropped 48.7%.
- Supramaxes: Declined 32%.
- Strong charter rates earlier in the year masked the Q4 downturn.
Oil Market and Economic Trends
- Oil Prices: Settled around USD 70.6/barrel as non-OPEC+ countries prepared to increase output.
- Chinese Demand: Dithering Chinese imports contributed to weaker demand, even as China remained the largest oil importer globally.
Ship Recycling Outlook for 2025
- Increased Supply: More vessels are expected to head for recycling in 2025, especially from the wet sector.
- Yard Upgrades:
- Pakistan and Bangladesh are gearing up to meet Hong Kong Convention standards ahead of its mid-2025 enforcement.
- This could revitalize recycling operations and improve environmental compliance.
GMS Demo Rankings and Pricing (Week 52, 2024)
- Recycling pricing and rankings for leading markets will likely reflect ongoing regional variations influenced by steel demand, currency fluctuations, and global trade dynamics.
After a year of low recycling volumes and declining freight indices, 2025 promises to be a year of transition. With an anticipated uptick in recycling activity and compliance-driven improvements, the maritime industry could see a more balanced year ahead.
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Source: MARINE LINK
