GMS: Geopolitical tensions dominate ship recycling markets

The recent assassination of a founding member of Hezbollah in Tehran has prompted Iranian leaders to vow revenge, signaling a “new phase of war” in an already volatile situation. Subsequently, Hezbollah fired multiple rockets into Northern Israel, causing no casualties so far. Meanwhile, the Houthis in the South are planning attacks on commercial vessels in the Red Sea, which is likely to keep freight rates elevated for the next 2–3 months and limit meaningful tonnage for global recycling destinations.

In Bangladesh, national unrest continues to escalate, with protests from student bodies and rising casualties attributed to alleged actions by the ruling party. The ongoing turmoil raises speculation about the potential overthrow of Prime Minister Sheikh Hasina’s unpopular regime, which could deepen the country’s political and economic crisis. In India, the aftermath of the General Elections and recent Budget announcement has left recyclers in Alang concerned about the country’s economic future, as fundamentals deteriorate. Meanwhile, despite leading market rankings, Pakistani buyers have reported no fresh arrivals at Gadani’s waterfront for nearly four weeks, marking a significant lull. Turkey, on the other hand, remains silent and out of the ship recycling conversation after a prolonged lack of activity.

On the domestic front, local steel plate prices remain volatile, and currencies of ship recycling nations have declined against the U.S. dollar, further contributing to uncertainty in the sector. With tensions in the Middle East limiting tonnage and the onset of summer holidays affecting focus, ship recycling efforts are expected to diminish this month as vessel prices and demand remain stagnant.

For week 31 of 2024, GMS demo rankings / pricing for the week are as below:

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