The ship recycling industry is currently experiencing a slowdown, especially in Bangladesh and Pakistan, while Indian recyclers remain active. Clarkson Platou Hellas, a shipbroker, described the market as entering a period similar to autumn, where activity from Bangladeshi and Pakistani recyclers is low, with only Indian recyclers showing positive signs. The Indian market is buoyed by factors such as financial stability, steel demand due to government support for local infrastructure, and the potential for more green recycling opportunities, with most yards complying with international standards.
In contrast, Bangladesh faces challenges due to Letter of Credit limitations and unfavorable exchange rates, while Pakistani recyclers, who were active in recent months, are struggling to profit due to currency fluctuations. Indian recyclers continue to outperform their counterparts in the sub-continent, bidding higher prices for ships. Despite lower prices compared to previous weeks, the $580/LDT for the ‘MSC Jasmine’ aligns with the market average, with bunkers supporting the price amid restricted yard options.
Indian yards have had a successful year in green ship recycling, with notable sales, including the 12th MSC boxship sale. Although the recycling sector has been slower this year compared to 2022, recent tanker sales might boost the scrapping of container and bulker vessels in the near future. GMS, a leading ship buyer, noted that India’s strong position is expected to continue into Q4, despite upcoming holidays. Pakistan’s market might pick up, but Bangladesh is likely to remain inactive due to uncompetitive pricing. Turkish buyers have shown interest despite unchanged prices, and the supply of containers remains high. Dry bulk charter rates have slightly improved, but older vessels are expected to flood the market in late 2023 and 2024.