The currencies of most recycling nations depreciated this week, according to cash buyer GMS, with the Bangladeshi Taka experiencing the most significant decline, according to Marine Link.
Surge In Activity
The dry bulk market experienced another week of decline, with the Baltic Shipping Index reporting a near 6% drop across most sectors.
- Ship Recycling:
- Q1 2025 is expected to see a surge in ship recycling activity, with numerous vessels arriving at recycling yards in India and Bangladesh.
- However, ship recycling prices have declined due to weaker currencies, depressed market sentiment, and falling steel plate prices in most regions, except Turkey and Bangladesh.
- 2024 Recycling Volumes: 2024 witnessed the lowest recycling volumes in over a decade as strong freight markets incentivized ship owners to keep older vessels in operation.
- Market Outlook: The combination of declining freight rates and challenging economic conditions is expected to further impact ship recycling activity shortly.
Uncertain Outlook
Vessel offers in the ship recycling market are starting to weaken due to a decline in vessel prices. Bangladesh has been particularly impacted, with prices falling by up to USD 30/LDT in a short period. Recyclers who had previously been eager to negotiate deals are now well-positioned with cheaper tonnage for the near future.
While the current supply of vessels for recycling primarily consists of vintage bulkers and a few LNG carriers, tankers and container ships are expected to enter the market in a more scattered manner throughout the year. The future of ship recycling for vessels sanctioned by the US remains uncertain. It is unclear how these vessels will be handled and recycled.
The overall outlook for the ship recycling market remains uncertain. Despite the initial influx of vessels, the recent decline in prices and the challenging economic conditions are creating a more cautious market environment. Ship owners are seeking higher sale prices, while buyers remain eager to secure deals, potentially leading to further price fluctuations.
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Source: Marine Link
