Uncertainty Reins in Ship Recycling Market
Anxiety and uncertainty reign across the shipowning community at large, especially for those with units trading in, or simply passing through the shipping lanes that are currently besieged by Houthi Rebel attacks in the Red Sea, says cash buyer GMS. This is invariably resulting in many owners avoiding the Suez Canal altogether, electing instead to sail around the Cape and subsequently increase voyage times, costs, and inadvertently assist global inflation.
On the ship recycling front, off of the back of the first set of 2024 line of credit (L/C) approvals that saw a subsequent increase in the number of enquiries emerging from both Bangladeshi and Pakistani markets this week, it seems there are still signs of (recycling) life in the sub-continent markets, says GMS.
Recently concluded Bangladeshi elections have also confirmed that the ruling party continues to maintain power, despite strong and ongoing opposition that has (reportedly) maintained the status quo on the ongoing riots, strikes, and political strife that has beset much of the country. Elections are also to conclude in Pakistan and India in the coming months and in India, Prime Minister Modi’s party is expected to maintain its command over a majority of the incoming votes for another five-year term. The Turkish market remained quiet as ever.
“Overall, amidst all of the ongoing uncertainty and turmoil that is currently unfolding across much of the Middle East, Chinese New Year holidays hopefully bring some much-needed hope and respite to the rest of the world. Coupled with the recent cooling of global freight rates, a marked increase in the supply of recycling candidates towards the end of Q1 2024 is expected to hit the industry.
“As such, the need of the hour would very-much lean towards adopting a wait-and-watch approach.”
For Bangladeshi and Pakistani recyclers however, L/C approvals dominated the news for domestic recyclers as rates from both markets started to inch up once again this week.
For week 2 of 2024, GMS demo rankings / pricing for the week are:
