In the past week, ship recycling destinations have experienced frustrating times as prices have remained stagnant and businesses have been slow to pick up after the Eid holidays, according to a report by GMS.
There was some positive news that Bangladesh has completed its accession to the Hong Kong Convention (HKC), which is a step forward for recycling markets before the convention officially takes effect.
However, the lack of available ships for recycling has started to improve as prices begin to stabilize. Ship owners and cash buyers are starting to accept that the current prices are likely to stay, leading some vessel owners with ships due for surveys to decide to sell them.
The situation in the sub-continent yards has been affected by constant rain, resulting in minimal labor capacity and slower operations.
Bangladeshi steel mills are also not operating at full capacity, leading to lower demand for vessels and keeping prices below expectations.
On a positive note for Pakistan, they have received encouraging news about an IMF loan of about $3 billion committed over the next nine months, which will help ease the country’s liquidity crisis. The first installment of $1.2 billion has already been received, providing some much-needed economic relief and stability. GMS suggests that they may re-enter the ship recycling industry once commercial banks resume issuing letters of credit.
Amidst the ongoing shortage of available ships for recycling, the Turkish market has faced further challenges in its fundamentals this week.