- Ship recyclers are facing a shortage of tonnage.
- Economic challenges and local fundamentals have led to a breakdown in vessel prices.
- Ship recycling locations are recovering from previous losses in value
Ship recyclers are facing a shortage of tonnage, making it difficult for them to operate effectively. This shortage is particularly felt in countries like Bangladesh and Pakistan, which heavily rely on imported ship steel for domestic infrastructure projects, reports Safety 4 Sea.
Impact of Freight Markets
Surging rates in dry bulk and container sectors are leading owners to keep even older vessels employed.
The unexpected surge in freight rates is diverting attention away from ship recycling, resulting in a famished state at major waterfronts.
Turkish Market Struggles
Economic challenges and local fundamentals have led to a breakdown in vessel prices in the Turkish market.
Aliaga Buyers have reduced levels by about USD 10/MT, marking a significant change in the market.
Geopolitical Hurdles
Ongoing geopolitical disruptions are impacting global trade and contributing to the sustained surge in charter rates.
Uncertainty regarding China’s economic situation raises questions about the overall health of trading markets.
Opportunities in Ship Recycling Markets: Recovery from Losses
Ship recycling locations are recovering from previous losses in value, particularly in Pakistan and Bangladesh.
Restrictions on L/C and finance have eased, allowing recyclers to regain momentum.
Political Stability
Political disruptions and elections across ship recycling markets in the subcontinent are settling, providing a more stable environment.
Despite India’s rescheduled elections, there is anticipation for a positive outcome, which could further stabilize the market.
Potential for Growth
Despite challenges, the ship recycling industry still offers growth potential, especially with the easing of financial restrictions and political uncertainties.
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Source: Safety4sea
