T
he lack of tonnage persisted in the ship recycling markets this past week. In its latest weekly report, Best Oasis (www.best-oasis.com), the world’s leading cash buyer of ships said that “the ship recycling sectors in four key destinations faced challenges this week. In India, the industry continues to struggle with disruptions from the monsoon season, with no immediate improvement in sight as recyclers await the budget announcement. Bangladesh saw no progress, with ongoing issues like Letters of Credit difficulties and unrest from protests exacerbating the situation. Pakistan’s market is inactive, relying on increased scrap imports due to unworkable vessel prices. Meanwhile, Turkiye’s market remained steady but low in ship supply, reflecting subcontinental trends. As per the official letter issued by GMB, a delegation from the European Parliament is scheduled to visit Alang in January/February 2025 to audit the ship recycling yards, including Priya Blue. This visit is part of their ongoing efforts to ensure compliance with international environmental and safety standards. The delegation aims to assess the operational practices, working conditions, and environmental impact of these facilities. The new agreement, pending formal adoption, allows EU-flagged ships trading in non-EU waters to be recycled at non-OECD yards listed on the EU-approved list, provided these yards are acceptable on the EU List. It will provide the Indian ship recycling yards with an opportunity to showcase their compliance with the highest standards in the industry and to receive valuable feedback for continuous improvement”, Best Oasis concluded.
Source: Best Oasis
Meanwhile, in a separate report this week, shipbroker Intermodal said that “the demolition market remained subdued this past week, impacted by strong freight rates that continue to limit the availability of vessels for recycling. In India, the steel market continued to decline, with local steel plate and scrap prices dropping further. The ongoing monsoon season exacerbated these declines, leading ship recyclers to reduce their offers due to weak demand.
Source: Intermodal
The market is now awaiting the upcoming national budget announcement, which is hoped to bring some positive news, but current conditions show a lack of demand recovery. Bangladesh faced mixed conditions, with minor improvements in local steel prices offset by reductions in scrap prices. The country also dealt with significant disruptions due to ongoing riots protesting government job reservations, which negatively impacted market activities. The unrest, coupled with difficulties in obtaining Letters of Credit, kept recycler interest low and market conditions challenging”.
Meanwhile, Intermodal added that “Pakistan’s market remained largely unchanged, with the local steel market stable but inactive. The introduction of new taxes on imports and the monsoon season slowed down construction activities, further affecting demand. However, the recent IMF loan agreement provided some economic stability, though it has yet to translate into increased market activity. Turkey’s market maintained stability but faced low activity levels. The local steel market remained steady, but demand for scrap was weak. Inflation showed signs of stabilizing, but the local currency’s continued weakness against the US dollar added to the challenges. The supply of ships for recycling was critically low, reflecting broader regional trends. Overall, the outlook for the demolition market remains cautious. The supply of fresh tonnages is expected to remain limited in the short term. Stakeholders are closely monitoring upcoming economic policies and budget announcements, particularly in India, which could introduce changes positively affecting market conditions”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
