Subcontinent Ship Recycling Market Status and Future Prospects
In the midst of expectations for a slowdown in the dry bulk and container sectors due to continuous deliveries and the upcoming Chinese New Year, GMS, the world’s leading purchaser of end-of-life ships, revealed insights in its recent report on the recycling market.
Both Bangladesh and Pakistan became signatories to the Hong Kong Convention in 2023, signaling a commitment to environmental standards. Anticipated upgrades in recycling facilities are on the horizon for both countries. Notably, Norway, in collaboration with the International Maritime Organization (IMO), has pledged funds to enhance the recycling sector in Bangladesh. This commitment follows financial support from the Japanese Government and the Japan Shipowners’ Association in the preceding year.
Despite these developments, GMS reported that the subcontinent markets, encompassing Bangladesh, Pakistan, and India, are currently subdued, with any significant improvement before the Chinese New Year deemed unlikely. The entry of two MSC container ships into Alang is part of MSC’s ongoing disposal program, having sold over 15 vessels since January 2023.
The MSC Jemima, constructed in 1994 with a lightweight of 12,677, arrived in Alang on January 24, while the MSC Eagle F, built in 2000 with a lightweight of 6,878, was beached on January 26.
As of the fourth week of the year, Bangladesh leads the ship recycling market, with typical prices of $550 per lightweight ton (ldt) for containers, $530 for tankers, and $510 for bulk carriers. GMS noted an improvement in sentiment in Bangladesh. Following closely, Pakistan experiences slightly lower prevailing price levels across the board, with a positive shift in sentiment. India follows, trailing by $20, characterized by weak sentiment. Turkey also reflects a subdued mood, with typical prices at $360, $350, and $340 for containers, tankers, and bulk carriers, respectively.
A significant development is the commitment of Bangladesh and Pakistan, both signing the Hong Kong Convention in 2023. Anticipated upgrades in recycling facilities in these countries are on the horizon. Norway, in collaboration with the International Maritime Organization (IMO), has already promised financial support for Bangladesh’s recycling sector. Additionally, the Japanese Government and the Japan Shipowners’ Association provided financial assistance last year.
Despite these positive steps, the subcontinent markets, as noted by GMS, remain relatively subdued, and any significant upswing before the Chinese New Year seems unlikely. Noteworthy is the arrival of two MSC container ships in Alang, marking a continuation of MSC’s substantial disposal program over the past year. MSC has reportedly sold more than 15 vessels since January 2023.
Specifically, the MSC Jemima, built in 1994 with a lightweight of 12,677, reached Alang on January 24, while the 6,878 ldt MSC Eagle F, constructed in 2000, was beached on January 26.
As of the fourth week of the year, Bangladesh leads the league in ship recycling with typical prices of $550 per ldt for containers, $530 for tankers, and $510 for bulk carriers. GMS suggests an improving sentiment in the region. Following closely is Pakistan, with prevailing price levels approximately $10 lower across the board, also experiencing an uptick in sentiment. India trails behind, with prices $20 lower and weak sentiment. A similar subdued mood is observed in Turkey, where typical prices are $360, $350, and $340, respectively.
