Challenges Persist In Ship Recycling Markets

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According to GMS’ latest weekly ship-recycling report, whilst various port positions remained thinned out across the Indian sub-continent ship recycling waterfronts over recent weeks, many of the tired old complaints about poor & adverse market conditions (particularly in India) or those of an extremely malnutritioned spread of recycling tonnage that remains available for sale, continue to fall on deaf ears, says an article published on safety4sea website.

Summary

  • GMS’ ship-recycling report highlights persistent challenges in the ship recycling markets across the Indian sub-continent, including poor market conditions and limited availability of recycling tonnage.
  • Complaints about adverse market conditions and a lack of vessels for recycling sales continue to be ignored, with End Buyers prioritizing cheap deals over addressing underlying market issues.
  • Recent developments show increased activity in sub-continent ship recycling nations, leading to busier port reports and a shift from thinned out port positions.
  • Recyclers face challenges due to the scarcity of vessels available for recycling sales, leading to low-quality tonnage being proposed for recycling and offers below USD 500 per ton.

Current Market Overview

GMS’ latest weekly ship-recycling report indicates persistent challenges in the ship recycling markets across the Indian sub-continent. Despite ongoing efforts, various port positions have remained thinned out in recent weeks, highlighting enduring issues such as poor market conditions, especially in India, and a limited availability of recycling tonnage for sale.

Deaf Ears To Market Complaints

Complaints about adverse market conditions and a sparse availability of vessels for recycling continue to fall on deaf ears, with End Buyers seemingly more focused on securing cheap deals rather than addressing underlying market challenges.

Recent Developments

Surprisingly, the past week concluded with increased activity in the sub-continent ship recycling nations, leading to busier port reports from an LDT (Light Displacement Tonnage) perspective. This surge in activity left local recyclers scrambling to acquire units at competitive rates, indicating a shift from the previous trend of thinned out port positions.

Challenges For Recyclers

The dearth of vessels available for recycling sales suggests that discounted deals may not be readily available at this time. The market is witnessing a trend where low-quality selection of laid-up, smaller LDT, Chinese-built tonnage is being proposed for recycling, leading to lower offers, some even below USD 500 per ton.

Market Conditions

Global recyclers are finding little activity to stay engaged, highlighting the challenging nature of the current market. Conditions in India remain particularly bleak due to steel plate volatility, struggling Indian Rupee, and rising election anxiety.

Regional Comparisons

While Bangladeshi and Pakistani markets show relatively better performance, many units are being ignored as End Buyers prefer to wait and monitor the market rather than invest in subpar tonnage. Concerns also linger regarding potential L/C (Letter of Credit) restrictions, indicating that the business landscape may not return to normalcy for an extended period.

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Source: safety4sea