The ship recycling industry is currently experiencing challenges as it approaches the enforcement deadline of the Hong Kong Convention (HKC) on June 26. According to Best Oasis, a prominent cash buyer of ships, the global ship recycling market has shown signs of weakness this past week, affected by regional holidays, price corrections, and regulatory uncertainty.
In India, prices declined further due to local pressures, and sentiments remained muted. Bangladesh’s market is inactive due to Eid festivities, with expectations for a reopening by mid-June.
Meanwhile, Pakistan witnessed minimal activity, as a few buyers acted in anticipation of the HKC deadline, but overall market momentum remained limited. In Türkiye, both import and local prices dropped amid weak demand and a slowdown following the holidays.
As the enforcement date of the HKC nears, market focus is shifting towards compliance readiness and post-holiday market direction. The global trade landscape is becoming increasingly complex with renewed U.S.-China trade tensions.
Recent U.S. tariffs initiated under the previous administration have raised concerns about supply chain stability and economic growth, prompting a downgrade in global economic forecasts by the OECD. Intermodal, another shipbroker, echoed similar sentiments, noting that the ship recycling markets experienced a subdued week influenced by ongoing religious holidays and concerns surrounding the HKC compliance deadline.
In India, the ship recycling market remains quiet, although there are government plans to expand operations near Alang. Despite a struggling local steel market, domestic economic indicators are somewhat positive, with inflation dropping to 3.1% and foreign reserves nearing record levels.
In Bangladesh, religious holidays have left both the ship recycling and steel markets lethargic. Moving forward, the government will prioritize regulatory matters and HKC compliance for recycling facilities as they transition to the post-HKC landscape.
In Pakistan, concerns exist over new tax schemes that could impact end-of-life vessel prices, adding to the uncertainty in the market’s outlook. Overall, the ship recycling market remains characterized by cautious activity and potential volatility as the HKC deadline approaches.