Ship Recycling: Indian Market Back in Action: GMS
Leading cash buyer for ships sending for recycling GMS opined in their weekly ship recycling report that, ship recycling in Indian market back in action.
The ship recycling industry in India and surrounding countries (known as the Indian subcontinent) has seen a surge in activity after the Islamic holy month of Ramadan, according to a report by cash buyer GMS. This upswing is surprising because it wasn’t expected, especially considering the recent volatility of currencies in these recycling destinations compared to the US dollar.
Prices Rise, Leading to Sales
GMS reports that prices for ships across the Indian subcontinent have gone up in recent weeks. This price increase, along with some particularly attractive sales, has led to a flurry of activity in shipyards. One recent sale of a container ship from Sinokor (a South Korean shipping company) for over $600 per Light Displacement Tonne (LDT) set the tone for the market. This high price surprised many ship owners, who are now more willing to sell their older container ships at similar prices. Recyclers, eager to buy more ships (referred to as “tonnage” in the industry), are excited about this new development. While no sales quite reached the $600/LDT mark this week, several deals were reportedly finalized at higher prices than before.
More Ships on the Market
This week’s market activity wasn’t limited to container ships. Several older bulk carrier ships and general cargo vessels, particularly from the Far East and China, are also being offered for recycling. This is likely due to a recent dip in freight rates, which had been quite strong for most of the year so far.
Indian Market Back in Action
Despite concerns about cheap steel products (billets) being imported from China, punitive tariffs (taxes) seem to be working. These tariffs were put in place to prevent a similar situation to the one that occurred in 2015 when cheap Chinese steel caused a major disruption in the ship recycling industry. This week, Indian shipyards made some competitive offers for the new wave of container ships, with some vessels headed to previously inactive yards in Alang, India. Bangladesh also remained active in buying ships, while Pakistan reconsidered their pricing strategies and Turkish shipyards were quiet due to celebrations.
Moreover, despite the dumping of cheap Chinese billets into the global / Indian markets, punitive tariffs are doing what they were meant to do, i.e., helping avoid another catastrophe similar to the one in 2015, during ship recycling’s most recent recession. Indeed, the Indian market has jumped back into the picture this week, with some impressive offers on this most recent batch of containers, securing their vessels for dormant Alang yards, while Bangladesh once again picks up a majority of the rest. As Pakistani Recyclers rethink their price ideas and Turkey spends the week invisible in celebrations, it has certainly been an interesting overall week for the industry.
Overall, this week has been a period of unexpected activity and change in the ship recycling industry of the Indian subcontinent.
