The ship recycling market is facing a challenging future, as highlighted by cash buyer GMS. While the Baltic Exchange Dry Index has shown gains across various sectors, oil prices have dropped to USD 59.50 per barrel following a significant drone attack on a major Russian refinery. Concurrently, the U.S. Dollar has strengthened globally, causing local steel plate prices in key recycling destinations to decline.
This combination of factors has negatively impacted demand and vessel offerings in the ship recycling sector, particularly in Bangladesh, which has outperformed India in beaching quotas this week. Despite rising freight rates benefiting stakeholders, recycling sales have remained sluggish throughout the year, with recent transactions occurring at disappointing levels in the low USD 400s/LDT and even the high USD 300s/LDT for less desirable tonnage.
India and Pakistan continue to struggle in securing competitive prices for older dry bulk units, particularly vintage handymax and panamax ships. Although there has been an uptick in proposals for recycling, the actual deals remain limited, with only a few end-of-life tankers and LNGs preventing the market from stagnating entirely.
