India ship recycling market still slow

India ship recycling market still slow

BEST OASIS world’s leading cash buyers for ships sending for recycling opined that, Inconsistent setting characterized the ship recycling activities for this week in the new year. There was no significant demand in India, where the market remained unchanged and is anticipated to progressively decline. Dollars have been in limited supply in Bangladesh for a considerable period, creating the present deadlock situation, and this ailment is anticipated to last for a substantial duration. The approaching elections in Pakistan, coupled with the possibility of currency depreciation as a result, are stimulating a revival in purchasing interest. Turkey is now undergoing a period of reduced activity, which is comparable to the previous week. 

The challenges faced by ship recyclers in acquiring tonnage in 2023 are becoming more severe due to the escalating Red Sea crisis, which is driving up demand for vessels and freight rates. The increase in freight rates, due to the crisis in the Red Sea, is anticipated to encourage owners to hold onto their older ships instead of selling them for recycling. 

The UN World Economic Situation and Prospects 2024 report indicates a projected deceleration in global economic growth, with an estimated decline from 2.7 percent in 2023 to 2.4 percent in 2024. The current state of global affairs poses significant risks to global growth. Factors such as weakening global trade, high borrowing costs, elevated public debt, persistently low investment, and mounting geopolitical tensions all contribute to this uncertain outlook. The projected growth in several developed economies, including the United States, is expected to slow down in 2024 due to factors such as high-interest rates, a decrease in consumer spending, and a weaker labor market.

INDIA

The market continues to observe a decline and is comparable to the previous week with little activity. The market remains low, consistent with its performance from the previous week, exhibiting a gradual decline over time. 

The level of activity is similarly minimal.  Although there is no apparent demand, there has been some interest in green recycling vessels.  

The Reserve Bank of India’s Monetary Policy Committee (MPC) has estimated that the economy may experience a growth rate of approximately 7% in the current financial year. Additionally, the United Nations has projected that India will grow at a rate of 6.2% in 2024, driven by strong domestic demand and robust growth in the manufacturing and services sectors. 

Beaching Dates 

09 January to 17 January 2024

23 January to 30 January 2024

08 February to 15 February 2024 

BANGLADESH

Presently, the market is devoid of activity and is in a state of impasse. The market is currently experiencing a significant lack of interest, with a deadlock situation arising from a severe shortage of USD. inevitably, this situation appears to be worsening.  

The Bangladesh elections which are going to be conducted on 7th January are close at hand, but, we do not anticipate any significant changes resulting from the elections. Bangladesh was unable to achieve its target for foreign exchange reserves by the end of 2023, despite the International Monetary Fund’s easing of conditions on net reserves. As of the conclusion of December 2023, the projected actual reserves amounted to 17.78 billion USD. However, its value approximated 16.75 billion USD. 

Beaching Dates 

13 January to 16 January 2024

28 January to 30 January 2024

11 February to 14 February 2024 

PAKISTAN

A renewed sense of demand has emerged in this market owing to upcoming elections. 

The market is stable and recyclers are seeking to buy tonnages before the upcoming general elections. Due to concerns about the potential devaluation of the currency resulting from the election, buyers are actively looking for vessels that can be delivered promptly. As a result, there is a revived demand for vessels with swift delivery options.  

The dollar reserves have exceeded 8.2 billion USD this week, indicating a healthy trend. Additionally, the IMF’s second tranche of 700 million USD is anticipated by mid January. 

Beaching Dates 

Throughout the month 

TURKIYE

The market is experiencing sluggishness, characterized by a lack of activity. 

The market is notably sluggish in this region, presumably due to the new year, and the activity is also low. 

The annual inflation rate for Turkey in December 2023 surpassed expectations with 64.8%, marking the greatest level since November 2022 and a rise from the previous month’s rate of 62%. 

The Turkish lira depreciated to a fresh all-time low of over 29.83 versus the USD, continuing a series of losses that accelerated towards the end of 2023, resulting in a year-end depreciation of about 37%. 

Beaching Dates Throughout the month