Ship Recycling: Best Oasis predicted that India’s market is on the rise

Ship Recycling: Best Oasis predicted that India’s market is on the rise

World’s leading cash buyer for ships sending for recycling BEST OASIS in their weekly market report revealed that We’d like to extend our warmest Eid greetings to our readers. May this auspicious occasion bring you joy, peace, and prosperity. Eid Mubarak! 

Ship recycling markets in four major destinations are experiencing varying trends. India’s market is on the rise, with a 10-15 USD increase in prices, mainly due to higher local steel prices, and this trend is expected to persist. Conversely, Bangladesh faces a market softening, attributed to upcoming festivities and holidays, alongside LC issues and reduced demand for local steel scrap, leading to fewer serious offers from recyclers and a potential further decline due to Taka’s weakening. Pakistan sees a deceleration in market activity as Ramadan and Eid holidays approach, with recyclers hesitant to close deals, a situation echoed in Turkey, which has entered a period of notable inactivity due to Ramadan and holiday observances. These developments underscore the complex interplay of local factors and global market dynamics affecting the ship recycling industry. 

Ship recycling has hit its lowest level in 20 years, influenced by market shocks, high demand, and small order books, per BIMCO’s latest report. In Q1 2024, only two million deadweight tonnes of ship capacity were scrapped, continuing a trend of low recycling rates not seen since before the 2008 financial crisis. Contributing factors include extended sailing distances due to security concerns in the Red Sea, sanctions on Russian exports, and changes in consumer behaviour during the COVID-19 pandemic. Despite the current downturn, BIMCO anticipates a rebound in recycling rates due to upcoming new-build deliveries in the container sector and expected increases in the tanker sector, projecting a significant rise in ship recycling from 2023 to 2033. 

Oil prices have continued to rise, poised for a second consecutive week of gains, bolstered by geopolitical unrest in the Middle East, worries about dwindling supplies, and anticipation of demand increases alongside economic recovery.

INDIA

The market has experienced an uptick and is anticipated to retain its stability. 

The market in this region has experienced an improvement, with an increase of approximately 10-15 USD. This positive trend is anticipated to sustain these levels for some time. The factor contributing to this improvement can be attributed to the local steel prices. Given this market enhancement, it is crucial to evaluate whether the Indian market will align with the pricing established by recyclers in other destinations. 

The World Bank has revised its projections for the Indian economy, forecasting a growth rate of 7.5 percent in 2024, which represents an upward adjustment of 1.2 percent from its previous estimates. 

Beaching Dates 

06 April to 13 April 2024

23 April to 29 April 2024

05 May to 13 May 2024 

BANGLADESH

Market downturn influenced by festive anticipation and shift in steel scrap demand. 

The market is experiencing a softening phase, attributed to the anticipation of upcoming festivities and holidays. A notable decrease in serious offers from recyclers is observed, further influenced by the ongoing LC issues. The demand for local steel scrap materials has diminished, as steel mills find more cost-effective options in the international market. 

Market forecasts suggest a potential further decline, driven by the recent weakening of the Taka, which had previously shown signs of strengthening. 

The World Bank forecasts Bangladesh’s real GDP growth to be moderately tempered at 5.6% for the current fiscal year, marking a downturn from the pre-pandemic decade’s average growth rate of 6.6%. 

Beaching Dates 

08 April to 11 April 2024 

23 April to 26 April 2024 

07 May to 10 May 2024 

500 400 300 200 100 0 

PAKISTAN

Market slowdown anticipated ahead of Eid, mirroring Bangladesh’s trends. 

The market is experiencing a significant deceleration in activity as we approach the end of Ramadan and the subsequent holiday period similar to the slowdown observed in Bangladesh. 

This week has seen a notable hesitancy among recyclers to finalize any transactions ahead of Eid. 

It is anticipated that activity will resume and potentially increase following the conclusion of the Eid festivities. 

Container Tanker Bulker: The IMF plans to finalize the release of Pakistan’s final $3 billion program instalment pending IMF board approval.

Beaching Dates 

Throughout the month 

TURKIYE

The market experiences unprecedented calmness amid Ramadan celebrations. 

The Turkish market went through a notably quiet phase, with activity nearly nonexistent and hardly any movements recorded. This lack of activity can be attributed to the Ramadan festivities and holiday period, which typically sees reduced operations. 

Turkish Lira has begun to recover after the opposition’s electoral victory, with experts forecasting that the positive election results will stimulate greater capital inflows, strengthening the currency. The orderly execution of the elections and the market’s favorable reception to current economic strategies were identified as critical contributors. 

Beaching Dates Throughout the month