According to Nikos Roussanoglou from Hellenic Shipping News Worldwide, we are experiencing a major advancement in sustainable ship recycling within the maritime industry.
The article discusses recent developments in the ship recycling market and mentions perceptions of major players the shipbreaking industry, among others. The shipbroker Allied Shipbroking mentions that progress has been made towards the ratification of the Hong Kong Convention (HKC) for sustainable ship recycling, with approval received from the Bangladesh government. However, it is noted that the convention still has room for improvement. Currently, the market lacks strength, and there are few vessels being sent for demolition. On the other hand, the supply of dry bulk and container vessels for recycling is decreasing, potentially due to a steady or recovering dry bulk market. Furthermore, tanker earnings are supporting the lifespan of vessels, and only the oldest ships are expected to appear on the market unless there is a significant decrease in market demand. MSC has sold seven vessels to Indian HKC yards so far this year, providing support to them.
On the other hand, Shipbroker Clarkson Platou Hellas observes that market conditions remain stable, frustrating recyclers with empty yards due to a lack of available tonnage. The focus on discussions surrounding LNG fuel and cleaner emissions at a recent shipowners’ forum indicates the emphasis on renewing the global fleet for environmentally friendly trades. However, it is questioned why there aren’t more ships being circulated for recycling despite increasing pressure on ship owners to meet environmental standards or consider recycling. It is expected that the supply to the recycling industry will increase from the fourth quarter of this year onwards. Currently, Bangladesh and India are the dominant areas in the Indian sub-continent for ship recycling, while Pakistan faces financial implications preventing its participation.
Seemingly, GMS, a leading ship buyer, mentions that despite a neutral-to-positive budget in Bangladesh, the Central Bank has imposed restrictions on letters of credit (L/Cs) due to a shortage of foreign currency and US dollar reserves in the country. This has temporarily halted sales to Bangladesh. However, the Indian market has improved, with positive moves in the Indian Rupee and steel gains encouraging end buyers to increase their offers. Pakistan is currently not involved in ship recycling due to political unrest and economic challenges. Turkey’s market reflects opposing fundamentals and a weakened currency. Overall, there is a lack of available tonnage in the market, and until more ships are introduced, all sectors are expected to remain sluggish.
In conclusion, recent developments in the ship recycling market include progress towards ratifying the HKC in Bangladesh, a decrease in the supply of vessels for recycling, the dominance of Bangladesh and India in the sub-continent, restrictions on L/Cs in Bangladesh, improved conditions in the Indian market, challenges in Pakistan, and a lack of available tonnage overall.
