The ship recycling market has been relatively quiet in recent weeks, influenced by several factors including holidays in key regions. Best Oasis, a prominent cash buyer of ships, noted a slight improvement in activity in India, bolstered by local demand and recent clarity on Goods and Services Tax (GST) for domestic vessels.
However, in Bangladesh, the market remained inactive during Eid, with prices only rising slightly in alignment with international trends. Pakistani buyers are focusing on smaller vessels but continue to face challenges with financing and pricing due to stricter banking regulations.
Turkey has also seen inactivity, mainly attributed to national holidays. Overall, the global ship recycling market appears muted, as it awaits a clearer trend post-holidays.
The evolving landscape of global trade, particularly the recent U.S. tariff changes, adds to the uncertainty affecting market sentiment. Although initially presented as firm, U.S. tariff policies have been met with mixed signals from officials, creating a volatile environment.
This uncertainty is increasingly crucial for the ship recycling sector, since it impacts steel demand and vessel availability, thus influencing the market dynamics. In a separate update from shipbroker Intermodal, it was observed that the ship demolition markets encountered a slowdown largely due to Eid celebrations across Bangladesh, Pakistan, and Turkey, compounded by apprehensions regarding new U.S. tariffs.
In India, stakeholders are actively assessing the potential impacts of these tariffs, with the government opting to pursue diplomatic negotiations rather than imposing retaliatory measures. Despite a recent uptick in demand, the available tonnage supply remains limited, and shipyards in Bangladesh are seeking extensions for facility upgrades to meet HKC standards.
In Pakistan, buyer interest is primarily focused on smaller vessels, but due diligence from financial institutions is creating hurdles for obtaining letters of credit. Although inflation has declined, concerns linger about the implications of U.S. tariffs on trade deficits.
Meanwhile, Turkey’s markets remain stagnant, awaiting a post-Eid resurgence while managing the local currency’s weakness against the dollar, which could complicate future economic conditions. Market sentiment seems less affected by U.S. tariff announcements, given that Turkish exports to the U.S. are subject to a lower baseline duty rate.