This week marks a significant milestone for the shipping industry as the Hong Kong Convention (HKC) finally entered into force after decades of efforts. This new regulation is expected to bring substantial changes, particularly for the Bangladeshi and Pakistani markets. These regions have a considerable amount of work to do to catch up with India’s advancements in facility upgrades that have developed over the past decade.
The implementation of the HKC is positive news for stakeholders, including ship owners, cash buyers, and recyclers, as it aims to enhance industry standards and promote environmental sustainability within the shipping sector. In the short term, the industry may face a challenging transition period as stakeholders adapt to the new regulations and the accompanying documentation required for HKC recycling. Owners and cash buyers looking to deliver vessels to the Indian sub-continent will now need to provide Inventory of Hazardous Materials (IHM) reports—Parts I, II, and III—along with a ‘Ready for Recycling’ certificate from the vessel’s flag state.
Additionally, these documents must be accompanied by HKC and ISO certifications specific to the recycling yard. Timely preparation of these formalities is crucial to prevent any delays or missed beaching tides. On a broader scale, the impact of recent attacks in Iran has led to fluctuations in oil prices, which fell over 11% last week.
Meanwhile, the U.S. Dollar has shown minimal changes against most recycling nation currencies. The tonnage supply appears to be increasing again, with older vessels entering the recycling stream, confirmed by the activity on Bangladesh’s and India’s waterfronts. Although this increase comes amid declining freight rates and economic uncertainties, local steel plate prices are also experiencing mixed trends; while some areas see declines, others remain stagnant.
In Turkey, the negative news continues to dominate, with little positive outlook to share. Overall, both owners and cash buyers are seeking opportunities in a challenging market environment as they navigate through these changes.