GMS: Heightened sense of caution among recyclers

This has severely affected global trade, as major ports along American coastlines are slowly turning empty. As inflation rises globally, America is gradually heading for a recession, evidenced by the U.S. economy shrinking in Q1. The weak performance of the U.S. Dollar this week, depreciating against some currencies while strengthening against others, highlights this trend.

The Baltic Exchange Dry Index reported increases as trade shifts globally and new trade agreements are being hashed out without the U.S., leading to minor improvements in freight rates, though overall activity remains low. The biggest blow came to oil prices, which dropped 1.6% to USD 58.29/barrel due to plummeting energy demand, inconsistent policies, and the threat of sanctions amidst Russian aggression against Ukraine. Local steel plate prices also took a hit, as steel trade in China and sub-continent ship recycling markets slowed, freezing steel prices.

On the ship recycling front, a shaky few weeks ended with news that Bangladesh’s NOCs (No Objection Certificates) for incoming vessels were granted after a month-long hiatus. This came after inspections by government departments to ensure ongoing HKC yard upgrades were on track. While 7 HKC yards in Chattogram are approved, around 20 others are waiting for accreditation, with progress varying. This stasis led to minimal sales and deliveries in Bangladesh, shifting focus to competing markets in Pakistan and India. However, rising political tensions between Pakistan and India, following a terrorist attack in Kashmir that killed 26 people, have led to a military buildup along their border, escalating the risk of armed conflict.

Overall, tonnage scarcities and shaky fundamentals continue to drag ship recycling activity, particularly as global markets struggle to recover and negotiate the aftermath of Trump’s tariff reforms. This keeps shipping markets propped up and deprives recyclers of viable candidates, with prices and demand remaining relatively unchanged from last week. However, there’s a heightened sense of caution among recyclers still on the lookout for tonnage.

For Week 18 of 2025, GMS Market Rankings / vessel indications are as below: