Ship Recycling Market : Slight improvement in Indian Market seen
Over the past few weeks, there have been notable improvements in the regulatory and compliance landscape of the ship recycling industry. Despite the overall subdued market, recent reports from shipbroker Clarkson Platou Hellas suggest positive developments. As December progresses and the festive holidays approach, market activity remains limited, with few ships available for recycling sales. The recycling destinations in the Indian subcontinent reveal a scarcity of tonnage, evident from the lack of new arrivals. Price levels, however, remain stable across recycling destinations.
In the ongoing efforts to enhance the industry’s environmental impact, the United Arab Emirates (UAE) has taken a significant step. Clarkson Platou Hellas reports that the UAE has introduced a stringent ship recycling regulation, intending to establish a more robust and responsible ship recycling program. This move aligns with the broader trend of promoting environmentally friendly practices within the maritime sector.
The UAE Ship Recycling Regulation (UAE SRR) appears, on the surface, to be more stringent than the EU Ship Recycling Regulation (EU SRR). Notably, it goes beyond banning beaching and extends to prohibiting landing at an intertidal zone. An interesting question arises about the applicability of these regulations to Turkey, in addition to the Indian subcontinent, or whether it is specific to the UAE’s recycling facilities. The implications of these regulations are expected to unfold in the coming years.
According to initial reports, the UAE SRR, set to come into effect in June 2025, will apply to various categories:
(a) UAE-flagged vessels. (b) Foreign tonnage recycled in the UAE. (c) Foreign ships deciding to recycle while in UAE waters. (d) Foreign tonnage conducting the final voyage for recycling directly from UAE waters.
Of particular concern is item (d), as its implications could impact the practice of ‘as is’ deliveries to cash buyers in UAE waters before ballasting the final voyage to the recycling destination. Further clarifications are anticipated in the weeks ahead, shedding light on any potential global repercussions affecting recycling destinations.
Meanwhile, Best Oasis, a prominent ship cash buyer, provides additional insights into the current state of the ship recycling sector. The report notes a slight improvement in the ship recycling sector in India compared to the previous week, along with minor positive developments in the local market. However, Pakistan and Bangladesh experience a quiet week, with the latter facing sluggish progress attributed to a shortage of US dollars and anticipation surrounding upcoming elections.
In contrast, Türkiye seems to be on an upward trajectory, with positive indicators observed. The European List of ship recycling facilities, overseen by the European Commission, sees amendments in its 12th edition. Two yards in Türkiye and one in the United States are re-included after a five-year absence. Additionally, five yards in Norway and one in Finland have their inclusion dates extended, while three establishments in Denmark, the Netherlands, and Norway are removed due to discontinuation of ship recycling activities. The European List now comprises 45 ship-recycling facilities, with 15 in the United States, 9 in Türkiye, and 35 in Europe (EU, Norway, and UK).
The report also highlights a joint statement issued by Saudi Arabia and Russia on December 7. The two largest oil-exporting nations globally urged all member countries of the Organization of Petroleum Exporting Countries and its allies (OPEC+) to participate in an agreement to reduce oil production for the sake of the global economy. The Russian President’s impromptu visit to Riyadh included discussions with the Saudi Crown Prince on coordinated measures for the global oil markets.
In conclusion, recent developments in the ship recycling industry suggest a positive shift in regulatory frameworks, with the UAE taking a notable step toward more responsible recycling practices. The implications of these changes, alongside the dynamics in various recycling destinations, indicate a complex landscape that requires continued monitoring in the weeks and months ahead.