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Ship recycling recovery not expected until second half of 2024

Ship recycling volumes are unlikely to recover until at least the second half of the year, as high charter and freight rates because of Red Sea diversions have reduced the supply of tonnage to the sector.

Lloyd’s List Intelligence data shows that 61 ships of a combined 805,000 gross tonnes hit recycling beaches in the first two months of 2024. This is less than half the 1.7m gt, provided by 75 vessels, beached in January and February 2023.

A shortage of tonnage has ensured relatively high prices paid for recycling candidates since 2022 are being maintained, although demand for recycled steel continues to be challenged by foreign exchange restrictions in important ship recycling nations.

Meanwhile, India’s local steel market has been under pricing pressure for several months with recyclers only buying ships to keep their facilities active.

Cash buyer GMS reports that major ship recycling markets were “utterly sleepy and tranquilised” in the past week with Indian subcontinent ship recyclers being provided with a “merciful collection” of smaller vessels of late.

“Given the near-total lack of market offerings, virtually no deals have been concluded, as evident from the weekly dithering traffic patterns at the various waterfronts of late, and a surprisingly lethargic India that remains puzzlingly peculiar at the bidding tables.”

“The year 2024 certainly has put the squeeze on the global ship-recycling sector,” said GMS.


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