The International Chamber of Shipping (ICS) and European shipowners celebrated the global enforcement of the Hong Kong International Convention this week. Adopted in 2009, it aims to mitigate health and environmental risks associated with ship recycling. ICS and ECSA advocate for its implementation to promote safe, sustainable practices in the industry.
In FY25, Alang-Sosiya in Gujarat recycled only 113 ships, the lowest in a decade, with a Light Displacement Tonnage of 10.06199 lakhs. The decline is due to booming freight rates, as fleet owners choose to keep old ships. Despite this, there is potential for increased volumes in the future.
Charter rates for dry bulk carriers have surged, creating a tonnage shortage amid healthy local port activity following a fire sale in South Asia. However, ship recyclers face pressures from geopolitical issues and falling vessel prices, impacting global recycling values. As the Hong Kong Convention looms, yards are upgrading facilities.
Draft amendments have been proposed in Bangladesh to update ship recycling and hazardous waste management laws to meet international standards. Key stakeholders from government and private sectors attended a workshop to review these amendments, emphasizing the importance of environmental performance and worker safety. The amendments aim to align with international conventions.
With the Hong Kong Convention (HKC) taking effect in 2025, shipowners must follow new rules for safe and eco-friendly ship recycling. DNV’s “Safe and Green Recycling for Shipowners” guide helps comply with HKC and EU Ship Recycling Regulations. The goal is to ensure safer recycling, protect workers and the environment, and improve sustainability.
The trade war and tariffs have caused a drop in recycling vessel prices, with an increase in older vessels entering the market. Despite stable dry bulk rates, the flow of tonnage continues due to the strong U.S. Dollar and low steel plate prices. GMS’s demo rankings provide insight into the industry’s challenges and opportunities.
The increasing environmental awareness surrounding ship recycling is expected to drive more ships to India’s recycling yards. Bansal Group India’s professionalism and commitment to safety have made them a notable player in the industry. Their adherence to national and international standards ensures environmentally friendly and sustainable ship recycling practices, setting a standard for the industry.
The Indian maritime sector is in need of a significant investment of $1 trillion by 2047 and ₹5 lakh crore by 2030 to reach its full potential. Green hydrogen production hubs are being established at key ports to decarbonize the shipping industry. India is set to become a major player in the global maritime market.
Recycling nation currencies faced declines this week, notably the Bangladeshi Taka. The Baltic Shipping Index also saw a downward trend, affecting dry bulk markets. Despite predictions of a healthier first quarter, vessel prices have dropped due to weaker currencies and depressed sentiments. The cheaper tonnage in has led to a challenging outlook.
This week (09-15 Dec. 2024), the maritime sector experienced pivotal developments, including the Mumbai Port Trust’s heritage tours, advancements in ship recycling legislation, and innovations in autonomous shipping technology. Furthermore, the need for improved seafarer welfare and environmental regulations highlights the industry’s commitment to navigating a sustainable and equitable future.
The International Maritime Organization’s Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships will be enforced on June 26, 2025. This agreement aims to protect workers and the environment from hazardous materials on ships, ensuring safe dismantling processes. Vessels over 500 GT must maintain an Inventory of Hazardous Materials.
BIMCO has launched the Ship Recycling Alliance to promote safe and environmentally friendly practices in the ship recycling industry. With the HKC set to take effect in 2025, the alliance aims to unite stakeholders and advocate for compliant recycling yards in major ship recycling countries.
The Association for Shipbuilding and Marine Engineering (VSM) in Germany is pushing for a review of legal obstacles hindering sustainable ship recycling. German companies struggle with complex approvals and certifications for recycling aged ships despite European and international regulations. VSM calls for a reduction in legal hurdles to promote a circular economy.
Ship recycling rates have hit a two-decade low, with only two million deadweight tons scrapped in the first quarter of 2024. Market shocks and strong demand have extended ship lifespans. BIMCO predicts a resurgence in recycling due to oversupply and increased tanker sector deliveries as new containers flood the market.
According to Marine Link, the shortage of tonnage in major ship recycling destinations persists, with some hope for improvement by 2024. India faces challenges such as fluctuating steel prices and competition from cheap Chinese steel, impacting the struggling ship recycling sector. Meanwhile, dry bulk freight rates continue to unexpectedly thrive.
