Ship Recycling: A Brief Rise in Activity Quickly Reversed in India: BEST OASIS

The Baltic and International Maritime Council (BIMCO) has introduced the Ship Recycling Alliance to advance safe and sustainable ship recycling practices. With founding members from prominent industry organizations in Bangladesh, Türkiye, Pakistan, and India, the alliance seeks to drive the global implementation of the Hong Kong Convention (HKC) for ship recycling. It will work closely with the International Maritime Organization (IMO) and the Basel Convention to ensure cohesive standards for waste management and sustainable recycling processes across the industry. 

This week, the ship recycling markets in South Asia and Turkiye remained largely subdued. In India, a brief rise in activity quickly reversed, leaving the market mostly flat, while Bangladesh’s market saw little change, maintaining its soft stance with hopes of increased activity in the coming months. Pakistan continued its downward trend, reflecting weak demand, and Türkiye’s market declined after weeks of stagnation, driven by reduced imports and local market weakness. Overall, the sentiment across these markets remains cautious, with demand challenges persisting regionally. 

Global oil markets are expected to see a surplus of over 1 million barrels per day in 2024 due to slowing Chinese demand and rising production from the US, Brazil, and Canada, the IEA reports. Chinese consumption has declined for six months, driven by economic challenges and a shift to alternative energy. Despite conflicts in the Middle East, crude prices dropped 11% since October due to strong global supplies. This oversupply is likely to keep prices low, reducing exporter revenues and boosting the shift to renewables. 

India

The market struggles to stabilize as low demand undermines recovery efforts. 

The market remained mostly unchanged this week, with a brief rise at the start but declining again later. 

Market participants are trying to stabilize the situation, but persistent low demand continues to disrupt these efforts, preventing sustained improvement. India’s economic growth outlook is strong, with CRISIL projecting a 7 trillion economy by 2031 at an average growth rate of 6.7%, S&P expecting 6.5-7% growth through 2027, and Moody’s, aligning with RBI, forecasting 7.2% GDP growth for FY 2024-25. Growth drivers include infrastructure investments, private consumption, and moderating inflation. 

Beaching Dates 

15 November to 21 November 2024 29

November to 07 December 2024

12 December to 20 December 2024 

Bangladesh

Price for Recycling Ships in Bangladesh Market stays subdued, anticipating a year-end rebound driven by 

seasonal trends. 

The Bangladesh ship recycling market remains soft, with no significant aggressive sales activity observed this week, maintaining the previous trend. 

Potential demand is anticipated in the coming months, as November and December typically see activity driven by year-end dynamics and bank-related purchases. 

Buyers’ actions will depend heavily on price levels. If prices remain high, significant market movement is unlikely. 

Bangladesh Bank has introduced a framework allowing industrial imports without traditional LCs, using letters of agreement or short-term loans, benefiting specialized economic zones. A separate notice mandates banks to clear unpaid import bills, ensure credit lines, and maintain cash flow, warning of penalties for delays to protect the country’s global financial reputation. 

Beaching Dates 

15 November to 17 November

30 November to 03 December

14 December to 03 December 

Pakistan

Price for Recycling Ships in Pakistan Local market extends downward trend as overall sentiment remains unchanged. 

The overall sentiment remained unchanged from the previous week, with the local market in continuing its downward trend. 

Pakistan Steel Mills (PSM) is set to be the focus of discussions between Pakistan and Russia next week for its revival. Alongside this, efforts are being made to strengthen collaboration in health, education, and culture, aiming to boost the local economy and foster bilateral ties. 

Pakistan’s debt-to-GDP ratio dropped to 65.7% in September 2024, reversing last year’s upward trend and reflecting improved fiscal management. While domestic debt rose to PKR 47.536 trillion over the year, the modest increase of PKR 376 billion since June signals controlled borrowing. Sustained growth and prudent policies remain essential to address the high overall debt. 

Beaching Dates 

Throughout the month 

Türkiye

Price for Recycling Ships in Türkiye The local market slumps amid stagnation and declining imports. 

The market declined after weeks of stagnation, driven by reduced imports and a weakening local market. 

Türkiye is expected to see economic recovery in the second half of next year, as per government statements, with administered prices aligned to inflation targets within budget constraints. Efforts are focused on sustainable growth and equitable income distribution through a rule-based program. 

Beaching Dates Throughout the month