Ship Recycling Unchanged After Eid Holidays
Things remain at a standstill regarding ship demolition activity. In its latest weekly report, Best Oasis (www.best-oasis.com), a leading cash buyer of ships, said that “the ship recycling market remained largely unchanged this week, with activity levels steady across key destinations and no major shifts in sentiment. In India, the market held firm, though local buyers stayed cautious as rising domestic steel prices faced growing pressure from more competitively priced Chinese alternatives. In Bangladesh, the tone remained soft, with limited local activity and prices stable at previously concluded levels, while developments continued on the regulatory front with the Ship Reprocessing Board beginning its operations. Market participants now await clarity regarding upcoming approvals for compliant yards, as uncertainty lingers for non-compliant facilities. Pakistan also saw no notable movement, with recyclers maintaining a waitand-see approach amid subdued global cues and ongoing competition from Chinese imports. Meanwhile, Türkiye experienced a slight downward trend in pricing sentiment, with recyclers holding off on adjustments for now, though a softer market tone could prompt changes ahead”.
Source: Best Oasis
“Overall, the global ship recycling market continued to operate at a muted pace, with participants largely observing conditions as they await clearer direction in the weeks ahead. The trade tensions between the U.S. and China have escalated sharply, with the U.S. now imposing combined tariffs of up to 145% on certain Chinese imports. This includes a 125% “reciprocal” tariff, along with an additional 20% levy tied to broader policy concerns, including China’s role in the fentanyl trade. In response, China has raised its tariffs on U.S. goods to 125%, signaling its own firm stance in the ongoing dispute. These aggressive trade measures have sparked renewed fears of global economic disruption, as markets react to the uncertainty and supply chains brace for potential delays and cost increases. Experts warn that continued escalation without coordinated international dialogue could weaken global trade, slow down growth, and hit developing economies the hardest. As both sides dig in, the need for constructive engagement and a return to cooperative frameworks becomes increasingly urgent”, Best Oasis concluded.
In a separate note this week, shipbroker Intermodal commented that “Bangladesh and Pakistan experienced lower than anticipated activity following the Eid holidays during last week, with shipyards prioritizing efforts to comply with HKC requirements. Meanwhile, India’s steel market faces challenges from price drops in imported Chinese steel. Concerns over the impacts of US tariffs continue to affect markets’ sentiment. In India, ship recyclers maintain a cautious stance amid limited vessel supply and selective buying opportunities. While appetite exists, uncertainty around vessel availability is tempering market momentum. The steel market shows improved local demand yet faces challenges from low-cost Chinese steel imports and discounts offered by Chinese mills, which are hindering demand for domestic steel products. On the economic front, the Central Bank has implemented monetary easing with a 25-basis -point rate reduction aimed at stimulating growth. However, uncertainty persists regarding potential global tariffs. The Indian government is pursuing a diplomatic approach, prioritizing negotiations with the United States over retaliatory measures Despite some resumption of activity after Eid holidays, ship recycling remains sluggish in Bangladesh. The market’s primary focus has shifted to HKC compliance, with recyclers awaiting confirmation of an expected extension for facility upgrades to June 2025.
Source: Intermodal
The Bangladesh Ship Reprocessing Board has officially begun operations, with clarification on the issuance of NOCs for compliant yards expected soon. Regarding US tariffs, the market responded positively to news of a 90-day deferral, though concerns remain about their potential implementation. Similarly to Bangladesh, Pakistan’s ship recycling market showed limited activity following the post-Eid reopening, with negotiations for selected recycling candidates. The focus of the sector is to the compliance front, with numerous shipyards accelerating upgrade works to obtain relevant HKC certification. On macroeconomic news, Pakistan faces challenges despite offering high Treasury bill yields. The country experienced nearparity in foreign investment flows during this fiscal year, with approximately $1 billion withdrawn by three countries. Investor caution continues due to concerns about the country’s fragile external sector and $25 billion annual debt servicing obligations, prompting the government to pursue IMF support and debt rescheduling. The Turkish ship recycling sector is experiencing a modest yet consistent influx of recycling candidates, which could potentially stimulate activity. However, prevailing market sentiment anticipates a softening of local ship scrap prices, due to weakness in domestic steel demand and uncertainty stemming from potential US tariffs”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
