The ship recycling industry is showing signs of revival. According to a recent report by shipbroker Clarkson Platou Hellas, there are two different outlooks among recyclers in Alang, India. Some recyclers are becoming more interested in acquiring ships, leading to a modest increase in prices by about $15-20 per lightweight ton (ldt) this week. However, others who already have ships in their yards are taking a cautious approach, with a less optimistic view of future market conditions. These improvements may not last long, as ingot prices are rising while demand for finished products remains low. The renewed activity in India may be partly due to a resurgence in Pakistan, which also seems to be “open for business” again. Letters of Credit are being issued, and more vessels are heading in that direction. However, some experts predict that this surge may be temporary, as financial resources may become saturated in the short term. Nevertheless, Pakistan appears to be the go-to market for the foreseeable future.
Demolition activity has been steady, with around 20 vessels heading for demolition in the past two weeks. It’s important to note that the tanker sales of ‘Irma Dulce’ and ‘Zelia Gattai’ were newbuilding projects that never got off the ground and will be processed domestically in Brazil. This has distorted the level of tanker recycling activity, which has been well below last year’s trend, with just over 1 million dwt recycled by the start of September, compared to five times higher at the same point last year. In contrast to last year, container sales were prominent this week, with the sale of the ‘Sinokor Vladivostok’ fetching an impressive $589/ldt, the highest price per ldt since the mid-August sale of the ‘Sinokor Tianjin’ for over $600/ldt. Indian yards continue to dominate container sales due to unattractive prices in Chattogram and Pakistani breakers’ preference for cheaper dry bulk vessels.
Meanwhile, GMS reported that speculation continues in the ship recycling markets of the Indian sub-continent. Sales are on the rise, and Cash Buyers are optimistic about a Q4 revival. India and the re-emerging Pakistani market are the main drivers behind this resurgence after a year of political, financial, and economic challenges in Pakistan. On the other hand, Bangladesh remains at the bottom of the price rankings, with low and non-serious offers from Chattogram Recyclers, who are facing L/C restrictions. As a result, the sub-continent market is essentially divided into two, with India and Pakistan competing for available market tonnage. Turkey, on the Western side, remains uncertain, with unchanged currencies and fluctuating fundamentals.
In summary, there is a notable increase in container vessels being sold for recycling in recent weeks, with a Sinokor-controlled unit fetching a speculative $589/LT LDT. Additionally, GMS has introduced the world’s first Ship Recycling Digital Platform, called the ‘Ship Recycling Portal,’ which aims to revolutionize ship sales and purchases in sub-continent markets by offering a more transparent, efficient, and convenient service. The platform was launched in Bhavnagar, India, and received participation from over 80 leading ship recyclers.