The Year Ahead: A Forecast for Ship Recycling in 2025
As the tumultuous year of 2024 comes to a close, industry experts are looking ahead to 2025 with cautious optimism. According to leading cash buyer GMS, the new year is expected to bring increased activity across all sectors of the ship recycling industry.
One of the key trends observed in 2024 was a record low in recycling volumes, leading to a shortage of tonnage for recycling yards. Despite the challenges faced by the industry, freight markets are starting to see more vessels being diverted for recycling after a year of high charter rates.
Recycling prices have fluctuated throughout the year, with a peak of USD 600/LDT in Q1 dropping to USD 450s/LDT by Q4. This has left many recycling yards in a state of uncertainty, as the cost of permanent closure outweighs the benefits of temporary shutdown.
Week 52 of 2024 saw a slowdown in global trade and currency instability in ship recycling nations, leading to quieter port activity in India and Bangladesh. Steel plate prices have also seen a decline, with Indian and Pakistani prices falling further while Bangladesh and China remained stable.
Despite a strong performance for most of the year, the Baltic Dry Exchange Dry Bulk Index experienced a significant decline in Q4, marking a 52.5% annual drop – the worst since 2014. This downward trend was reflected across all sectors, with Capesize, Panamax, and Supramaxes indices all showing declines.
GMS anticipates an uptick in recycling vessel supply in 2025, as the industry prepares for potential upgrades to meet Hong Kong Convention standards ahead of its enforcement next year. Additionally, oil prices are expected to stabilize around USD 70.6 per barrel, with non-OPEC+ countries increasing output despite fluctuating Chinese demand.
Looking ahead, 2025 could see significant developments in ship recycling, with countries like Pakistan and Bangladesh ramping up efforts to meet international standards and adapt to changing market conditions.
GMS Demo Rankings and Pricing for Week 52 of 2024