According to GMS’ latest weekly ship-recycling report, the global ship-recycling market faced a tumultuous end to May, driven by rising vessel prices and a shortage of quality tonnage. This situation is expected to persist into June, influenced by several key factors.
Surge in Vessel Prices
Despite minimal volatility, demand from Alang recyclers has driven up local steel plate prices by nearly USD 45/Ton. The increase is due to strong demand for vessels, though the availability of decent-quality tonnage remains low, impacting recycling yards across the globe.
Regional Yard Dynamics
In Pakistan and Bangladesh, many yards are adopting a wait-and-see approach, hesitant to make firm offers amidst the uncertain supply. Alang yards, anticipating a partial shutdown as workers return home during the monsoon, hope to see a reduction in operational costs. The lack of steel supply in Turkey continues to be a significant issue, despite ample fuel resources.
Limited Supply of Large Vessels
The market has seen a few large vessels (20,000+ LDT) available for recycling. This scarcity includes only a single Capesize bulker and a Panamax container sold for recycling this year, with no Suezmax or VLCC candidates. Freight rates are picking up and are expected to remain steady, further limiting the supply of vessels for recycling.
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Source: Safety4Sea
