Ship Recycling Market Still Subdued
The ship recycling market has remained subdued during 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 largely subdued, with sentiment cautious and activity restricted by a mix of seasonal and structural factors. In India, limited market traction was observed early in the week, but momentum soon faded as buying interest softened. While inquiries have been present, the continued lack of available vessels has prevented any notable movement. The market remains watchful, with participants waiting for clearer signs of direction. In Bangladesh, the market holds steady at subdued levels, with minimal activity reported. The onset of the monsoon season has further dampened sentiment, and buyers continue to adopt a cautious approach. Conditions remain largely unchanged from the previous week. In Pakistan, selective demand continues, driven mainly by buyers seeking vessels to meet HKC certification needs. These buyers are prepared to secure tonnage at higher price levels, though this activity remains isolated and not reflective of broader market momentum. Overall, the market sentiment mirrors last week’s cautious stance. In Türkiye, the holiday period has kept market activity muted. Sentiment and pricing remain stable, with any significant movement likely to follow once regular trading resumes post-holidays”.
Source: Best Oasis
Best Oasis added that “across all regions, recyclers remain cautious, with soft demand and no immediate signs of a shift in market dynamics. The broader global economic outlook remains mixed. While global growth is expected to continue at a modest pace, high interest rates, persistent inflation in some regions, and geopolitical risks are weighing on market confidence. These factors contribute to cautious sentiment in shipping and recycling markets, as buyers remain wary of committing in an uncertain economic environment”.
In a separate report this week, shipbroker Intermodal commented that “market conditions in India and Bangladesh remained generally soft last week, while Pakistan witnessed a modest uptick in activity. India continues to maintain a strong position in the global ship recycling market, supported by numerous HKC-compliant yards and fewer HKC-related regulatory constraints compared to its regional counterparts. This operational flexibility allows Indian recyclers to actively negotiate and secure vessels. However, the market is not without challenges. Uncertainty persists due to fluctuating steel prices and a limited supply of tonnage. On a broader economic front, India reported a narrowing trade deficit, defying expectations of a wider gap, primarily due to a decline in imports. This development is likely to strengthen the Indian Rupee against the U.S. Dollar, offering potential support to the recycling sector. Another subdued week for the Chattogram coast, marked by limited activity. The landscape continues to be shaped by the ongoing monsoon season, hesitant buyers, and regulatory hurdles. While the number of HKC-compliant recycling facilities has grown to 15, overall market sentiment remains muted. The local steel market remains sluggish, despite some signs of recovery, as stagnant steel prices prompt domestic mills to explore more cost-effective imported alternatives. On the trade policy front, market participants are increasingly concerned about the broader economic impact of recently imposed U.S. tariffs, which could reduce the country’s competitiveness.
Source: Intermodal
These ripple effects risk extending into the ship recycling industry and place additional pressure to the sector. Meanwhile, Pakistan’s recycling sector showed signs of rejuvenation this week. Activity was largely driven by yards progressing toward HKC compliance, with 5-6 yards nearing the final stages of readiness. These yards are expected to receive provisional DASR certificates following stringent inspections, allowing them to legally import vessels for dismantling. As part of this certification process, recyclers are actively sourcing suitable tonnage, even showing a willingness to pay competitive prices to secure vessels that meet the required standards. While overall market sentiment remains cautious, Gadani appears to be experiencing a modest revival, supported by ongoing yard upgrades and increased regulatory alignment. Turkey’s ship recycling market remains sluggish with limited activity. A dull local steel market outlook is impeding the arrival of fresh recycling tonnage, compounded by a weakening Turkish Lira against the US Dollar that is impacting general market sentiment”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
