- Oil prices dipped slightly as markets reacted to Iran’s potential closure of the Gulf of Hormuz, raising supply concerns.
- The Indian sub-continent’s ship recycling sector continues to face tonnage shortages and price declines, despite strong freight rates.
- The upcoming Hong Kong Convention is prompting stricter self-regulation across key recycling hubs.
- Global uncertainties—ranging from U.S. trade policies to Middle East conflicts—are adding pressure to already volatile steel and currency markets.
The Baltic Exchange Dry Index (BDI) experienced a sharp 3.5% decline, marking its lowest point in two weeks and reversing much of its recent progress. The Capesize segment led the downturn with a weekly drop of nearly 6.5%, while the Panamax index saw a slight dip of 0.2%. These shifts reflect the sensitivity of dry bulk markets to global events, as noted in a recent report by MarineLink.
Ongoing Volatility Grips Ship Recycling Sector Despite Geopolitical Uncertainty
Oil prices ended the week marginally lower at USD 73.80 per barrel, as markets reacted swiftly to reports that Iran may shut down the Gulf of Hormuz—an action that would effectively halt Iranian oil exports. The aftermath of the US strikes sparked immediate volatility across global financial markets, with the US dollar strengthening against most recycling nation currencies and showing erratic movement throughout the trading day.
Local steel plate prices followed a similarly unstable trend, with declines persisting in some regions and stagnation in others. The uncertainty extended to the ship recycling sector in the Indian sub-continent, where ongoing geopolitical tensions and regulatory changes are reshaping the landscape. The upcoming enforcement of the Hong Kong Convention has prompted a wave of precautionary restrictions, as recyclers aim to align operations with evolving standards.
Market activity in 2024 has already been subdued by a tonnage shortage, attributed in part to firming freight rates that have discouraged vessel owners from offloading older ships. Despite expectations for a more active recycling market in 2025, much of the anticipated tonnage remains delayed, as aging vessels continue to generate steady income amid the global instability.
With limited supply at the bidding tables, recyclers face growing uncertainty. Factors such as shifting trade policies, evolving tariffs, and ongoing conflict in the Middle East complicate predictions on currency fluctuations and steel pricing. As noted by GMS, stakeholders across the recycling chain are left reading the market’s “tea leaves” to navigate the road ahead.
Did you subscribe to our Daily newsletter?
It’s Free! Click here to Subscribe!
Source: MarineLink
