The ship recycling market appears to have started 2025 positively, with increased buying activity from various buyers across the Indian subcontinent. This suggests a more optimistic outlook for the ship recycling industry early in the year, reports Marine Link.
Outlook Uncertain
Despite some recent optimism, the global economic outlook remains uncertain, with geopolitical turmoil and China’s economic fragility continuing to impact key economic factors that influence ship recycling.
Reports suggest that several large vessels, including those with questionable or sanctioned backgrounds, have been sold for scrap recently. This activity has been concentrated in India and Bangladesh, where a few financially capable recyclers are operating.
Bangladesh has made progress in upgrading its recycling facilities to comply with the Hong Kong Convention, which is set to enter into force soon. Four yards have already received approvals, with more expected to follow in the coming months.
However, the overall outlook for ship recycling remains challenging due to various factors, including geopolitical uncertainties and economic instability.
Bullish Market
Hopes for a bullish recycling market have cooled off towards the end of 2024. The anticipated return of a pro-business administration in the US, which was expected to boost recycling activity, has not materialized.
India recently imposed tariffs on imported Chinese steel to protect its domestic industry. This has had a positive impact on steel plate prices in Alang and Gadani, potentially increasing the attractiveness of these Indian yards to ship owners. However, Pakistan may regain a competitive edge in the ship recycling market due to the recent price cooling. Turkey continues to face economic challenges, with no significant changes reported this week.
Shipowners, having benefited from profitable operations in recent years, may delay scrapping their older vessels, preferring to maximize their operational lifespan. This could potentially dampen the immediate demand for ship recycling services.
While an increase in supply is anticipated in the coming year, the immediate outlook for the ship recycling market remains uncertain.
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Source: Marine Link
