Global Ship Recycling Market Still Under Pressure
The global ship recycling market has been under pressure during the start of 2025, following the overall trend of 2024. In its latest weekly report, Best Oasis (www.best-oasis.com), a leading cash buyer of ships, said that “the global ship recycling market continues to struggle, with weak demand and declining prices across all key destinations. In India, conditions worsened as cheap imported steel flooded the market, preventing any recovery. Bangladesh saw recyclers buying at lower prices amid stalled development and political uncertainty, with demand unlikely to improve even with LC availability. Pakistan remained quiet, with minimal sales due to low prices, though some buyer interest is emerging at current levels. Türkiye experienced a slight uptick in import prices but faced further local market declines, with major steel mills halting purchases due to weak demand”.
Source: Best Oasis
According to Best Oasis, “overall, market sentiment remains negative, with further declines expected. Global growth is projected at 3.3% for both 2025 and 2026, slightly below the 3.7% average from 2000 to 2019. The 2025 forecast remains largely unchanged from October 2024, with stronger growth in the U.S. offsetting slower performance in other major economies. Global inflation is expected to decline to 4.2% in 2025 and 3.5% in 2026, with advanced economies returning to target levels sooner than emerging markets. While risks to the mediumterm outlook are tilted to the downside, the near-term outlook shows mixed risks, with positive growth prospects in the U.S. and challenges in other regions. Effectively managing these risks will require careful policy decisions, global cooperation, and structural reforms to foster long-term stability and growth”.
In a separate note this week, shipbroker Intermodal added that “the ship recycling sector witnessed muted activity this week, prevailed by weak steel demand and cautious market sentiment. In India, the market remained subdued. Prices for local steel plates and imported scrap held steady, but the influx of low-cost steel imports hinders local competition. While the Indian Rupee strengthened this week gaining 45 basis points against the US Dollar, closing at Rs. 86.18, this improvement provided little relief for recyclers. Market participants are looking ahead to the upcoming national budget announcement, hoping for policies that could revitalize the sector. Bangladesh’s market saw some activity over the past two weeks, with recyclers concluding transactions despite challenging political and economic conditions. Political instability caused by the absence of a permanent, elected government continues to create uncertainty, while delays in infrastructure projects have further dampened sentiment. Concerns over a potential economic slowdown persist, fuelled by sluggish recovery and pending international loans. Additionally, the continued depreciation of the Bangladeshi Taka against the US Dollar adds further strain.
Source: Intermodal
In the recycling market, many market participants have adopted a wait-and-see approach monitoring market trends, expecting fresh tonnage to enter the market alongside a sluggish local steel market. Meanwhile, some recyclers have prioritized compliance with HKC requirements, with the government intensifying pressure on yards to meet the necessary standards. In Pakistan, the central bank reduced its key policy rate for the sixth consecutive time since June to stimulate demand and curb inflation. The World bank has recommended to the government to increase public investments to boost growth. The local steel market faces headwinds from cheap Iranian imports, constraining buyers’ ability to offer competitive prices. The ship recycling market continues to be lethargic with low prices offers deterring sellers. As in Bangladesh, the Gadani recyclers face the challenge of meeting HKC standards. Failure to do so could weaken the sector’s competitiveness and hinder its ability to attract end -of-life tonnage, further amplifying the difficulties of the market. In Turkey, the still mills are cutting down their production in response to poor demand. Buyers have adopted a bearish stance on prices, refraining from making significant purchases. The vessel recycling market is at a standstill. On the economy front, the government announced a 250-basis-point interest rate cut, its second in a row, following the slowdown in inflation recorded in December”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
