GMS, a cash buyer, notes a concerning calm settling over global economies, particularly impacting the ship recycling sector. The availability of vessels has significantly decreased, reaching some of the lowest levels in a decade. Prices have dropped by over USD 100/LDT since early 2024, with offerings dwindling below the USD 500/LDT mark. Geopolitical events have played a significant role in the market’s instability, causing sentiments to fluctuate unpredictably.
Bangladesh has been largely inactive in the ship recycling sector due to infrastructure projects being put on hold by the current interim government. In contrast, India has seen an influx of tonnage, while yards in Bangladesh and Pakistan remain empty due to weak demand. The influx of cheaper Chinese steel has added to the challenges faced by Indian and Pakistani recyclers, with tariffs failing to stabilize local steel prices.
The U.S. Dollar has strengthened against competing currencies in ship recycling nations, further impacting the industry. The industry is bracing for economic pressures in the coming months, with fears of a resurgence of challenging times in the ship recycling sector and global economy. The dry bulk sector is also experiencing a cooling trend, with firm freight rates and fewer vessels expected to head for recycling in the near future. GMS demo rankings and pricing for week 41 of 2024 reflect the current state of the market.
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