Sub-Continent Ship Recycling Markets Face Volatility Amidst Shifting Sentiments
World’s leading buyer of obsolete ships GMS has highlighted that in the ever-fluctuating sub-continent ship recycling markets, recent developments have sparked a glimmer of hope amidst a turbulent landscape. After witnessing alarming declines, there appears to be a tentative rebound, with a sense of stability emerging across the markets. This newfound confidence has led to an increase in interest among investors looking to acquire the limited available tonnage for recycling.
However, as the week drew to close, global currencies faced a collective setback against the Us Dollar, exerting pressure on sentiments within the major ship recycling destinations. Pakistan, in particular, experienced significant declines, exacerbating concerns. Meanwhile, local steel prices in India and Bangladesh began to stabilize after weeks of stagnation, although both markets faced challenges during April. In Bangladesh, Buyers emerged with a renewed eagerness to negotiate post-Eid, while India saw a decline of approximately $25 per LDT over the course of the month.
GMS says “As we enter the traditionally quieter summer & monsoon months, the number of available candidates for recycling remains scarce and is rumored to have further diminished this week. However, the charter markets for Dry Bulk and Container sectors have displayed a newfound stability, ensuring vessels continue to trade.”
Unfortunately, Pakistan remains ensnared in political and economic uncertainties, with the recent arrest of Ex-Prime Minister Mr. Imran Khan further exacerbating domestic unrest. The Pakistani Rupee's record lows against the US Dollar have added to the challenges faced by End Buyers. Furthermore, attention is now turning to the upcoming Bangladeshi budget in early June, as potential End Buyers choose to adopt a wait-and-watch approach before firming up their offers for tonnage.
In this landscape of uncertainty, the Turkish market remains in a state of suspended animation, shrouded in silence. As prices stabilize across sub-continent markets and demand shows signs of resurgence following the holidays, industry observers can only hope for an increase in the number of vessels available for recycling and a revitalization of the vacant plots.
For week 19 of 2023, the GMS demo rankings and pricing reveal the current state of the market. Bangladesh maintains stability, with the highest sentiment and pricing, followed by India. Pakistan's weak position is reflected in its lower sentiment and pricing. Turkey, unfortunately, continues its decline with declining sentiment and pricing across all sectors.