Ship Recycling Markets: U.S. Dollar Surge and Industry Outlook
Last week, ship recycling markets witnessed a significant surge in the value of the U.S. dollar against most ship recycling nation currencies, with the exception of China, according to a report from cash buyer GMS.
Steel plate prices showed mixed signals, with some firms seeing a firming trend, while others experienced declines or flatlined prices. This has created confusion among ship recyclers and the industry as a whole. However, there have been signs of improvement as the recent reduction in tonnage at bidding tables appears to be easing, with local port positions in India and Bangladesh reporting a healthy collection of arrivals and deliveries.
In Bangladesh, there has been a release of vessels that were previously idling outside ports, waiting for their respective NOCs. Exemptions from the ministry for recently approved Hong Kong Convention yards have allowed for several deliveries to take place. However, some units committed to non-certified yards remain stranded outside port limits.
Despite these developments, market sentiments remain uncertain and demand is low due to diminished pricing and confusing fundamentals. The focus has shifted to the more active Indian and non-Hong Kong Convention Pakistani markets, as vessels face hurdles in meeting Hong Kong Convention standards.
As economic constraints continue to affect the industry, prices may face downward pressure even as freight markets stabilize and charter rates increase. The supply of candidates for recycling is expected to rise in the second half of the year, as older vessels reach the end of their charters and trading opportunities dwindle.