Global Ship Recycling Markets Face Currency Pressures: BEST OASIS
The global ship recycling industry continued to navigate a complex mix of currency volatility, supply shortages, and regional disruptions this week, according to the latest report from leading cash buyer BEST OASIS. While underlying sentiment in key markets remains cautiously optimistic, actual transactional activity has been limited due to a lack of available vessels and external economic pressures.
India: Currency Depreciation Weighs on Prices
In India, the market experienced noticeable downward pressure, primarily driven by a sharp depreciation of the Indian Rupee against the US Dollar. The exchange rate weakened to 94.88 this week from 94.21 in the previous week, impacting recyclers’ purchasing power and forcing local price levels lower.
Despite these challenges, industry sentiment remains cautiously positive. Ship recyclers are showing resilience, supported by expectations of near-term improvement in both currency stability and steel demand. However, a severe shortage of incoming vessels continues to constrain market momentum. With limited tonnage available, buyers are becoming increasingly selective, focusing only on deals that align with their revised pricing expectations.
Prices in India remained stable week-on-week, with container vessels at USD 430 per light displacement ton (LDT), tankers at USD 415/LDT, and bulk carriers at USD 400/LDT. The market is currently described as “firm,” although activity levels remain subdued.
Bangladesh: Flooding Brings Operations to a Halt
The ship recycling sector in Bangladesh faced significant disruption this week due to heavy rainfall and severe flooding in Chattogram. These adverse weather conditions have effectively paralyzed yard operations, with some facilities forced to halt activities entirely.
The slowdown has been compounded by weak downstream demand, particularly in steel plate sales, which has dampened overall sentiment. High-priced vessel offers are struggling to attract buyers under current conditions, as recyclers remain cautious amid declining steel consumption.
Despite these challenges, a handful of optimistic buyers continue to show interest in securing vessels ahead of the upcoming national budget, anticipating potential policy shifts or improved market conditions. Bangladesh continues to offer the highest price levels among major recycling destinations, with container vessels at USD 470/LDT, tankers at USD 460/LDT, and bulkers at USD 435/LDT.
Market participants are closely monitoring both weather developments and macroeconomic indicators for signs of recovery in the coming weeks.
Pakistan: Market Remains Quiet
In Pakistan, the Gadani recycling market remained largely unchanged compared to the previous week. Activity levels continue to be subdued, with minimal buyer engagement and no significant transactions reported.
Recyclers are maintaining a cautious stance, preferring to stay on the sidelines amid ongoing uncertainty. Prices remained stable, with containers at USD 465/LDT, tankers at USD 460/LDT, and bulkers at USD 445/LDT. The market continues to be described as “firm,” although actual activity does not reflect strong momentum.
Türkiye: Softer Sentiment Amid Currency Weakness
Türkiye’s ship recycling market showed signs of slight softening over the past week, reflecting a moderation in sentiment. Many recycling yards in Aliağa are currently operating at or near full capacity, reducing the urgency to acquire additional tonnage.
The continued weakening of the Turkish lira has also contributed to a more cautious and risk-aware approach among recyclers. While a weaker currency can theoretically enhance competitiveness, ongoing volatility has instead discouraged aggressive bidding.
Prices in Türkiye remain significantly lower than in the Indian subcontinent, with container vessels at USD 290/LDT, tankers at USD 280/LDT, and bulkers at USD 270/LDT. The market is currently categorized as “soft,” with only limited interest from yards that still have available capacity.
Steel and Oil Indicators Show Mixed Trends
The global steel market showed little change in key regions, with HMS 1&2 (80:20) prices remaining flat in India, Bangladesh, and Pakistan at around USD 410–415 per tonne. Türkiye recorded a slight increase of 1.20% in steel prices, offering some support to local recyclers.
Meanwhile, oil markets continued to trend upward. Brent crude rose by USD 4.69 to USD 110.17 per barrel, while WTI crude increased by USD 7.76 to USD 103.20 per barrel. Rising oil prices could influence shipping economics and future recycling decisions.
No Vessel Transactions Reported
Notably, the report highlighted that no vessel sales were recorded globally during the week, underlining the current mismatch between buyer expectations and seller price ideas.
Outlook: Cautious Optimism Amid Constraints
Overall, the global ship recycling market remains in a holding pattern. While sentiment in key regions like India remains cautiously optimistic, practical challenges—including currency fluctuations, weather disruptions, and a shortage of recyclable vessels—continue to limit activity.
Industry stakeholders are expected to keep a close watch on macroeconomic developments, currency movements, and seasonal factors in the coming weeks, which will likely determine the direction of the market in the near term.
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