- Ship recycling markets are seeing increased activity despite overall weak pricing.
- Falling steel prices and economic uncertainties are impacting recycling efforts.
- Key recycling nations face challenges, with Pakistan re-entering the market briefly.
The Baltic Sea Freight Index has dropped for the ninth consecutive week, reaching the year’s lowest, prompting positivity in the ship recycling sector. This decline affects older trading fleets, pushing them toward recycling yards worldwide, reports Marine Link.
Decline in Steel Prices Damps Negotiation Interest
Steel plate prices have seen a sharp decline in Bangladesh and India, following recent dips in Chinese steel prices.
This decline reduces the motivation for active negotiations for tonnage among recycling yards.
Pakistan Rejoins Recycling Markets Temporarily
This week saw a brief reappearance from Pakistan in the recycling market, with a significant arrival at Gadani. However, the market soon fell back into dormancy due to ongoing economic pressures.
The BRICS nations met in Russia to discuss a new currency that could challenge the US Dollar’s dominance. However, given the IMF’s heavy reliance on the US Dollar, any shift remains uncertain.
Currency Depreciation Impacts Recycling Nations
Recycling nations are seeing currency depreciation, including Turkey, while the US Dollar gained slightly against the Chinese Yuan (CNY). This fluctuation adds further strain on the recycling market.
Bangladesh has struggled to compete with Indian recycling facilities despite recent positive signs. Lower price offerings have made it difficult for Bangladesh to secure tonnage.
Pakistan’s Short-Lived Market Presence
Despite a promising start, Pakistan’s activity was short-lived, with its prices for available units falling well below USD 500/LDT. This trend shows limited demand even for high-quality container units.
Turkey’s recycling levels have dropped, with prices expected to slide further toward USD 450/LDT. The market shows no signs of recovery and is expected to remain weak into 2024.
Global Ship Recycling Market Outlook Remains Bleak
The overall outlook for the ship recycling market remains challenging. Cash buyer GMS reports that declining steel prices, currency drops, and limited demand all point to a continued downturn.
GMS provides demo rankings and pricing, indicating the persistent downward trend in ship recycling rates across major recycling regions.
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Source: Marine Link
