According to GMS senior trader Jamie Dalzell, ship recycling volumes have remained relatively subdued in 2023. From January to May 2023, only 118 ships were sold for demolition. Of these, 53 vessels were sent to India for recycling, while 65 vessels went to Bangladesh.
Mr. Dalzell highlighted that the scrapping activity in the tanker sector has cooled off compared to the previous year. In 2022, tankers accounted for the majority of vessels scrapped, with 69 ships totaling 5.1 million deadweight tons (dwt) sold for recycling. However, the situation changed in 2023 due to the implementation of sanctions following Russia’s invasion of Ukraine. During the first two months of 2023, only 0.1 million dwt of tankers were sold for scrapping, primarily attributed to robust market conditions and the utilization of older tankers for trading sanctioned energy cargoes.
While ship recycling remains dominated by the dry bulk segment in 2023, the recycling of tankers and container ships is relatively low. These segments have experienced strong economic returns and increased vessel orders, which have reduced the number of vessels being recycled in these categories.
However, despite the subdued volumes in 2023, BIMCO, a global shipping association, has predicted that the next ten years (2023-2032) will witness a significant increase in ship scrapping. It is estimated that approximately 15,000 vessels will be scrapped during this period, double the number compared to the previous decade. This projection is driven by the aging fleet and the implementation of stricter environmental regulations in the industry.