GMS: Optimism emerges for ship-recycling in 2024 amidst 2023’s challenges

Critical factors such as declining currency values (except in India), flatlining / declining local steel plate prices, and the dreadful (& ongoing) lack of funding on fresh acquisitions (in Bangladesh and Pakistan), all came together and festered into the inescapable quicksand that eventually bogged the markets down by over USD 100/LDT on vessel prices, over the course of the summer / monsoon months of 2023.

The ongoing dearth of tonnage seems to have played its part and kept vessel prices relatively buoyant in nearly all of the international ship recycling markets – around (and even well in excess of) USD 500/Ton in the Indian sub-continent & around USD 350/MT in Turkey – certainly some very strong numbers to contend with, given that lows in the USD 200s/Ton greeted the sub-continent ship recycling markets only as recently as 2015 / 2016.

Additionally, the lack of financing available to Ship Recyclers in both Bangladesh and Pakistan through much of 2023 has only further ensured that a minimal number of deals would be concluded into these markets – so unsparingly & unforgiving have these recent restrictions on L/C approvals been.

As explained, while the rampant flatlining of local steel plate prices (in Bangladesh & Pakistan) was ensued by the ever-present volatility that devoured much of 2023, early 2024 (especially until May) will likely be a similarly quieter period as elections are expected across various sub-continent locations and even though Bangladesh & India are not expecting any change in their leadership or drastic changes to the ongoing status quo, this may / may not be the greatest of news needed to stimulate their respective economies & drive some much-needed growth for the rest of 2024.

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