- Increased vessel arrivals in India and Bangladesh despite declining availability.
- Freight rates peaked since December, while oil dropped to USD 69.76/barrel.
- New U.S. tariffs and currency depreciation pressured the market.
- Political instability in Bangladesh, Pakistan’s cash crisis, and U.S. restrictions on Chinese-built vessels add to volatility.
Despite a decrease in available tonnage, Indian and Bangladeshi ports experienced a surge in vessel arrivals. The ship recycling market remains deceptive, with shifting trends as demand fluctuates.
Freight Rates Surge as Oil Prices Decline
Freight rates climbed to their highest levels since December, supported by strong charter demand. Meanwhile, oil prices dropped significantly, recording a month-over-month decline and closing at USD 69.76/barrel.
Tariff Wars & Currency Depreciation Impact Ship Recycling
The introduction of new U.S. tariffs on Mexico, Canada, and China is adding pressure on vessel offerings. Steel prices have declined, and currency depreciation has weakened the purchasing power of major ship recycling nations, particularly in India and Pakistan.
Political & Economic Instability Weighs on Market
Political unrest in Bangladesh and Pakistan continues to disrupt operations, while India’s ship recyclers are feeling the impact of a weakening Rupee. Meanwhile, Turkish recyclers are struggling with a collapsing Lira, with scrap vessel prices dropping below USD 280/ton.
Potential Market Shifts & Future Outlook
The reopening of the Red Sea may influence freight dynamics, while ongoing geopolitical conflicts could lead to supply chain disruptions. Additionally, potential U.S. restrictions on Chinese-built vessels could further destabilize global trade. While demand for vessels remains firm, the supply of tonnage may tighten in the coming months, keeping the market in a state of uncertainty.
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Source: Safety4sea
