GMS, the world’s leading ship cash buyer, has reported a relatively quiet week in the ship-recycling industry due to ongoing Eid holidays and a shortage of available ships for scrapping. This has resulted in a decline in new sales and overall activity in the market. Consequently, any price proposals received are considerably lower than market value and not worth considering until liquidity issues in the industry improve. GMS suggests that until local markets stabilize, it is difficult to make sense of the current situation. However, the industry continues to make progress in other areas, such as the recent positive development in Bangladesh’s accession to the Hong Kong Convention. This move signifies a significant advancement toward the convention’s implementation in another market, which is a major win for the industry. Bangladesh has now joined the list of 20 other countries that have ratified the convention, marking an important milestone for the country.
In contrast, Pakistan is at risk of falling behind as it has not upgraded its facilities to comply with the Hong Kong Convention guidelines, unlike India and Bangladesh. Additionally, Pakistan is facing economic, political, and financial turmoil, making its ship-recycling destination in Gadani nearly obsolete. India has experienced a relatively stable week with prices remaining low and limited ship arrivals, leading to unfulfilled sales. In Turkey, where Eid celebrations are taking place, there has been little movement in the local market. As expected, the flow of ships for scrapping has decreased over the past month, and the industry is hopeful for improved prices and increased activity after the holiday season.
Allied Shipbroking, a shipbroker, also observed an unremarkable week in the ship-recycling market, with limited available tonnage primarily heading to Bangladesh, except for container vessels designated for Hong Kong Convention recycling in India. MSC, a shipping company, sold its ninth vessel, the “MSC Federica,” for Hong Kong Convention recycling in India. The achieved price was slightly lower than the previous sale in early June. Positive news may be on the horizon with regards to Pakistan, as IMF support is expected to address the nation’s import-export imbalance and improve the functioning of the foreign exchange market. This could be the first step toward reviving Pakistan as a competitive recycling market.
Clarkson Platou Hellas, another shipbroker, highlighted the ongoing pattern of slow activity and limited tonnage in the ship-recycling market. The current week’s market conditions have become even quieter due to the Eid Al-Adha festivities. Although there have been occasional sales of container units, indicating some activity, the scarcity of available tonnage is expected to persist as ship owners focus on their summer holidays. However, a significant development is the imminent entry into force of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC). With the recent ratification of the Convention by Bangladesh and Liberia, the industry awaits the 24-month period specified by IMO regulations for the HKC to become maritime law. This milestone is seen as a momentous occasion for the industry.