Ship recycling is on the rise with demand particularly strong in India according to a new report released by a leading global cash buyer of ships and energy assets.
Best Oasis noted in its latest market report that India’s ship recycling market was improving, driven by robust local demand.
“The market has shown significant improvement and is currently on an upward trajectory. Trends suggest that the market conditions will remain favourable at least through the end of this month,” said Best Oasis.
“This upward movement is primarily driven by robust local demand, supporting stronger market performance. India’s steel exports to Europe reached a five-year high of 3.3 million tonnes in FY24, a 65% increase from the previous year. However, India’s market share declined in the UAE and Southeast Asia, with exports to the UAE at a five-year low.”
In addition, increased competition from Chinese exports has impacted Indian steel mills’ performance in the UAE and Vietnam.
According to the report, Bangladesh’s market is stable but slightly declining.
“Challenges include sluggish demand from steel mills and letter of credit issues from USD shortages, while an influx of Chinese-built vessels has impacted buyer confidence,” said Best Oasis.
“Pakistan’s market remains unchanged with no new vessel entries and persistent slow activity, though steady recycling rates persist despite diminished construction sector demand, suggesting possible future price drops.”
In Turkey, where steel prices are stable, ship recycling yards are still offering higher prices for immediate vessel delivery due to strong demand.
Meanwhile shipbroker, Banchero Costa, noted that the Indian subcontinent had experienced a more active week overall, with a number of “attractive” vessels in terms of Light Displacement Tonnage (LDT), age and delivery in active sales discussions, “with owners seemingly happy to at least test the market on container and more recently older Handy and Panamax vessels”.
“In terms of pricing, with healthy competition between cash buyers, we have seen levels on offer for delivered ships creep up to in excess of the $550 Long Tonnes/LDT mark,” said Banchero Costa.
