Weekly Ship Recycling Markets Stay Muted as Currency Pressures and Tonnage Shortage Weigh on Global Sentiment

Weekly Ship Recycling Markets Stay Muted as Currency Pressures and Tonnage Shortage Weigh on Global Sentiment

The global ship recycling market remained largely subdued this week, with the world’s leading cash buyer, BEST OASIS, noting a continuation of stagnant conditions across major South Asian and Mediterranean destinations. Despite isolated pockets of activity, currency volatility, limited workable tonnage, and persistent financial constraints kept overall sentiment weak, resulting in minimal changes in pricing or demand.

India: Slight Uptick Fails to Shift Overall Market Stagnation

India recorded a marginal pickup in inquiries at the tail end of the week, yet overall conditions remain broadly unchanged. The dominant factor restraining movement continues to be the strengthened U.S. dollar, which has made purchasing costlier for local recyclers while squeezing already thin margins.

Buying interest exists, but the persistent shortage of marketable tonnage is limiting negotiations. Whatever tonnage does reach the market is attracting cautious, low-level offers as buyers avoid overexposure in a volatile currency climate.

Adding further pressure is the continued inflow of dark-fleet/shadow-fleet vessels, which are being offloaded at significantly discounted pricing. These units, often sold quickly to opportunistic buyers, are pulling general sentiment downward and undercutting standard market pricing structures.

Meanwhile, the local industry continues to wait for the long-anticipated Domestic Agent Ship Recycler (DASR) guidelines. Recyclers and intermediaries have been urging authorities for clarity, as the pending document has created uncertainty around regulatory and commercial procedures.

Bangladesh: LC Constraints Continue to Choke Market Activity

Market sentiment in Bangladesh reflects the stagnation observed in recent weeks, with no significant shift in appetite or pricing. While end buyers remain interested in 8,000–10,000 LDT units—traditionally the most sought-after category—the actual availability of such vessels is scarce.

Larger units are witnessing even softer interest, primarily because only a handful of domestic buyers currently possess the Letters of Credit (LC) capacity required to pursue bigger deals. For most players, the ongoing LC crisis remains the single largest barrier to market participation, restricting commitments despite stable domestic steel fundamentals.

With no easing of banking constraints in sight, the Bangladeshi market is likely to remain operationally restricted in the near term.

Pakistan: Market Remains Flat and Low on Momentum

Pakistan stayed firmly on the weaker side of the market this week. Local sentiment remained subdued, with no notable improvements in demand, pricing, or buyer activity.

Minimal tonnage inflow and little appetite for new purchases have kept the market directionless. Currency challenges, domestic economic pressures, and subdued steel demand have left recyclers largely inactive, resulting in yet another silent week for Gadani yards.

Türkiye: Stability Continues as Market Holds Its Weekly Pattern

Türkiye once again exhibited steady, unchanged conditions in line with its typical week-to-week rhythm. While the market did not show any major negative trends, it also failed to produce new momentum.

Local steel markets remained steady, but demand for tonnage stayed muted. With few fresh vessels entering the market and no major drivers to shift sentiment, the Turkish recycling sector continued in its predictable holding pattern.

Currency Movements: Mixed Week Across South Asia

Currency fluctuations played a crucial role in shaping buyer sentiment across recycling destinations:

• USD/INR weakened slightly from 88.69 to 88.74, a loss of 0.05, maintaining pressure on Indian buyers.

• USD/BDT shifted from 121.92 to 122.13, a loss of 0.21, adding further strain to Bangladeshi importers.

• USD/PKR strengthened from 282.41 to 282.09, a gain of 0.32, offering minimal relief but not enough to stimulate demand.

• USD/TRY softened from 42.16 to 42.31, a loss of 0.15, reflecting moderate lira depreciation.

Global Scrap Price Trends: Stable to Slightly Positive

Prices for HMS 1&2 (80:20) and shredded scrap remained largely steady across key recycling hubs:

The minor increases in Pakistan and Türkiye reflect slight strengthening in local steel markets, though not enough to influence vessel pricing.

Ship Recycling Prices: All Markets Declared Soft

Recycling prices across all major destinations stayed unchanged, with BEST OASIS characterizing all markets as soft:

The stability represents a market waiting for direction rather than one recovering.

Vessels Sold This Week: Activity Remains Limited

The sales chart remained thin, with most transactions occurring at undisclosed prices, primarily in China. Notable sales include:

• YUAN ZHI HAI – Bulker, 13,065 LDT, delivered China

• JIA XIANG SHANG – Bulker, 10,495 LDT, delivered China

• JIA NING SHAN – Bulker, 10,542 LDT, delivered China

• JIA SHUN SHAN – Bulker, 10,892 LDT, delivered China

• JIN XIN SHAN – Bulker, 11,048 LDT, delivered China

In South Asia, only two notable sales were confirmed:

• TARA – General Cargo, 3,135 LDT, delivered Alang, at USD 370/LDT

• STAR ADVANCE – Chemical Tanker, 9,691 LDT, as-is Singapore, sold at USD 441/LDT (with 205 MT VLSFO & 74 MT MGO ROB)

Outlook: Markets Waiting for Triggers

With global steel demand flat, currency markets volatile, and tonnage shortages expected to persist, the week ahead is likely to remain quiet. Buyers across the region continue to wait for more workable vessels and clearer monetary conditions. Until then, caution will remain the prevailing stance across all major ship recycling markets.

Author: shipping inbox

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