Ship Recycling Market Under Pressure<\/p>\n
Hellenic Shipping News<\/p>\n
he ship recycling markets have been under pressure over the past week, although there have also been signs of slight improvement. In its latest weekly report, Best Oasis (<\/p>\n
), a leading cash buyer of ships said that \u201cthe Indian market has experienced downward pressure this week, primarily driven by a sharp depreciation of the INR against the USD, which has forced local price levels lower. Despite weaker underlying fundamentals, ship recycling sentiment remains cautiously positive, with recyclers showing resilience in expectations of near-term improvement. A severe shortage of incoming vessels continues to weigh on overall market momentum, limiting transactional activity. Market participants remain selective, with activity largely dependent on price alignment and currency stability\u201d.<\/p>\n
Meanwhile, in Bangladesh, \u201cthe Chattogram market has been significantly disrupted due to heavy rains and severe flooding, effectively paralyzing daily operations. Recycling activities have slowed considerably, with some yards halting operations entirely amid adverse conditions. High-priced vessel offers are struggling to find buyers, as subdued steel plate sales continue to dampen overall sentiment. Despite current challenges, a few optimistic breakers remain active, showing willingness to secure vessels for delivery ahead of the upcoming national budget.<\/p>\n
Market participants are closely monitoring both weather conditions and economic developments for signs of recovery. In Pakistan, the Gadani market has seen no significant change compared to the previous week, with conditions remaining largely unchanged. Activity levels continue to be subdued, with limited buyer engagement and no notable transactions reported. Sentiment remains cautious, as recyclers prefer to stay on the sidelines amid ongoing uncertainty. Finally, the Turkish recycling market has shown signs of slight softening over the past week, reflecting a moderation in overall sentiment.<\/p>\n
Many recycling yards in Alia\u011fa are operating at or near full capacity, reducing the urgency to acquire additional tonnage and limiting bidding activity. Continued weakening of the Turkish lira has contributed to a more cautious and riskaware approach among recyclers. While a softer currency could enhance competitiveness, volatility has instead encouraged restraint in purchasing decisions. Yards with available capacity may still demonstrate stronger interest and adopt a more competitive stance; however, such cases remain limited\u201d, Best Oasis concluded.<\/p>\n
Meanwhile, in a separate report, shipbroker Intermodal said that \u201cthe backdrop across the major ship recycling hubs last week remained broadly steady, with Bangladesh holding its lead and Pakistan showing encouraging signs of improvement. Conditions at Alang held largely unchanged, with little to report. Underlying appetite for recycling candidates persists among buyers, but a persistent shortage of available tonnage continues to constrain deal flow. Adding to the pressure, a weakening Indian rupee, partly a consequence of disruptions to energy flows, has eroded purchasing power. Against this backdrop, softening domestic steel prices have only reinforced the cautious tone pervading the recycling sector. Gadani saw sentiment firm over the week, buoyed by healthier domestic steel dynamics. Stronger restocking demand from local mills and rising energy costs have lent support to plate prices, improving recycling economics in turn. The stability of the Pakistani rupee has added a further competitive edge for buyers. On the supply side, an uptick in available candidates, has provided welcome relief. The broader macro picture remains watchful, however, with elevated inflation prompting the central bank to tighten policy through a rate increase. Bangladesh retains its position at the top of the regional table and enters the pre-monsoon window with its fundamentals broadly intact, though supply-side headwinds persist. With freight markets running firm across wet and dry alike, the incentive for owners to keep trading remains strong, steadily narrowing the pool of vessels available for recycling. On the demand side, buyers remain largely on the sidelines, reluctant to commit amid a charged geopolitical environment. Whether meaningful transaction volumes can be achieved before the monsoons set in remains unclear. The Turkish ship recycling market remains steady but constrained, with weaker pricing relative to the Subcontinent limiting activity. On the macro front, concerns over heightened inflation and a downward revision to the IMF\u2019s growth outlook add a further note of caution\u201d.<\/p>\n
Nikos Roussanoglou, Hellenic Shipping News Worldwide<\/p>\n
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