Ship Recycling : India has seen a resurgence.
The ship recycling market has been facing challenges lately, with low prices and limited interest in the industry. Shipbroker Clarkson Platou Hellas reported a decrease in activity due to holidays in the Far East, which reduced the number of potential ships for recycling. Most recyclers in Bangladesh and Pakistan have been inactive, and India has seen cautious approaches due to falling steel prices.
The upcoming Tradewinds Ship Recycling Conference in Singapore is expected to bring together industry experts to discuss various topics. However, unlike previous years, there isn’t much anticipation for a spike in rates. The market is affected by low tonnage availability and fluctuating steel and currency markets. Additionally, the dry freight market’s recent increase might delay the introduction of new units into the recycling market.
On a positive note, GMS, a prominent ship buyer, mentioned a slight improvement in the market entering the fourth quarter. India has seen a resurgence in recycling, with some significant container purchases approaching the USD 600/LDT mark. Alang in India has become a preferred destination for ship transactions due to high demand from buyers, supported by successful G20 summit outcomes and infrastructure project announcements.
Pakistan has reemerged in the market, with several buyers securing approvals to purchase Bulkers. However, after successful transactions, Gadani, a shipbreaking yard in Pakistan, experienced a slight dip in demand due to resumed bank restrictions. Nevertheless, as L/C approvals are expected to resume, more sales are anticipated in Pakistan before the year ends.
Bangladesh, on the other hand, faced disappointments as prices dropped significantly during the summer and monsoon months. The Chattogram market in Bangladesh has struggled to recover fully. Approval for Letters of Credit (LC) is challenging due to lower steel plate prices, leading to temporary halts in inventory sales to prevent underselling at loss-making levels.
In summary, the ship recycling market is facing challenges due to low prices, limited tonnage availability, and fluctuating market conditions. While there are signs of improvement in certain regions, the industry remains cautious about future developments. The upcoming conference will likely shed more light on the industry’s prospects, but a significant turnaround isn’t expected in the near term.