Ship Recycling Market
The ship recycling markets in the Indian subcontinent continue to remain highly unstable as both currency values and local steel plate prices in India and Bangladesh experienced further declines this week, according to recent reports from cash buyer GMS.
Market Suffering Intensifies
“Vessel prices and demand are taking on a whole new meaning of industrywide suffering, especially with Turkey and the Pakistani ship recycling markets still languishing at the same low levels over recent weeks,” says GMS. The ongoing political turmoil in the Middle East is expected to restrict the supply of vessels for recycling until at least the fourth quarter of 2024. This situation is supported by strong freight rates across key sectors, even amidst the traditional summer slowdowns.
Impact of Political Unrest in Bangladesh
Bangladesh is currently facing severe internal strife, with escalating student riots leading to a rising death toll. These riots have resulted in widespread internet and mobile outages across major cities, affecting key financial hubs and severely hindering the market’s ability to conduct regular business operations efficiently.
Uncertain Economic Outlook in India
India’s ship recycling market is also facing significant uncertainty, with widespread attention now focused on the upcoming budget announcement on July 23. According to GMS, the outlook for this budget is increasingly negative given the recent performance of key domestic fundamentals. If the budget proves to be adverse, shipowners and cash buyers with tonnage intended for Alang will find themselves grappling with a market experiencing sharp declines, creating scenarios where high-priced fixtures could lead to financial losses upon delivery.
Pakistani Market as a ‘Safe’ Alternative
With the Indian market becoming increasingly precarious, attention has shifted to the Pakistani market. Although prices there remain below the USD 500s/LDT, it is considered a relatively safer choice for non-HKC (Hong Kong Convention) tonnage.
Future Outlook
As the ship recycling markets navigate through these turbulent times, stakeholders are observing economic signals and political developments. The hope is that stability will return, allowing for a more predictable and profitable environment.
Stay tuned for more updates on the evolving situation in the ship recycling markets of the Indian subcontinent and beyond.
For more insights you can download full GMS report.
