Ship Recycling Activity Still Subdued
The ship recycling market has maintained its subdued activity over the past week. In its latest weekly report, Best Oasis (www.best-oasis.com), a leading cash buyer of ships said that “ship recycling markets across South Asia and Türkiye remain subdued, with caution prevailing across the board. In India, local sales are slow despite a slight uptick in price sentiment, as limited tonnage availability draws buyer interest without driving prices up. Bangladesh faces mounting delays due to stricter vessel approvals, disrupting supply chains despite underlying demand. Pakistan continues to mirror the previous week’s quiet tone, with little change in activity or sentiment. In Türkiye, minimal market movement is compounded by rising political unrest and economic uncertainty, further dampening confidence”.
Source: Best Oasis
According to Best Oasis, “overall, supply constraints, regulatory hurdles, and broader economic pressures continue to keep the market in a holding pattern, with stakeholders hesitant to commit until clearer signals emerge. Following the European Commission’s recent evaluation of the EU Ship Recycling Regulation, activist groups have renewed discussions and debates over the disposal of end-of-life vessels. Their concerns focus on loopholes such as reflagging, which allows ships to bypass EU standards and be dismantled in nonEU yards. However, calls to limit recycling strictly to EU-listed facilities may overlook on-the-ground progress in key global recycling hubs. With a growing number of Hong Kong Convention-compliant yards in India and now also in Bangladesh, the global landscape is evolving. As the industry braces for a surge in vessel retirements, a more inclusive and unified approach — rather than regionally confined policies — may prove more effective in balancing environmental responsibility with available capacity”, the company’s report concluded.
In a separate report, shipbroker Intermodal said that “cautious sentiment and limited activity were observed in the ship recycling markets last week, influenced by the upcoming Eid holidays and concerns over compliance with HKC standards. The Indian market remains watchful, particularly regarding the potential impact of Trump’s proposed tariffs, affecting several sectors of the economy such as automotive and pharmaceuticals. In the ship recycling sector, market conditions seem to favour sellers presently, as the supply of candidate vessels remains limited, while buying interest holds steady. However, these supply-demand dynamics have not reflected to the prices yet. The local steel market has shown signs of improvement, driven by firmer demand. Uncertainty dominates the Bangladeshi ship recycling sector, with concerns over shipyard compliance with the upcoming HKC regulations. Shipbreaking yards that fail to commence upgrade works by March 31st will not be permitted to import vessels for recycling after the Eid holidays. Stricter government controls on vessel approvals have further constrained market activity, with permissions granted only to facilities meeting HKC compliance targets.
Source: Intermodal
Meanwhile, the local steel market remains sluggish, weighed down by weak demand, leading to reduced production and discounted stock sales. In Pakistan, the market is on a standstill without any developments since previous week. This slowdown is expected to continue through the Eid holiday period, with some action anticipated afterwards. On the compliance front, ship recycling yards must accelerate upgrade efforts to meet HKC standards and obtain SOC certifications. Failure to do so could result in operational restrictions imposed by the authorities. In broader economic news, the Pakistani government secured additional financial support from the IMF to promote economic growth. The Turkish ship recycling market remains under pressure, heavily impacted by political instability and the depreciation of the Lira against the U.S. Dollar. This has significantly eroded buyers’ purchasing power and business confidence. Market activity is minimal, further dampened by the upcoming holiday period”, Intermodal concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
