Ship recycling is projected to see a significant increase, potentially doubling to 16,000 vessels over the next decade. By analyzing recycling patterns from 2000 to 2019 for various ship segments, predictions suggest that the recycling rates established during that period will continue.
For instance, if about 10% of all 20-year-old capesize ships were recycled on average in the past, similar trends are expected to occur in the upcoming years. The range of recycling activity during the previous two decades offers a reliable basis for these future calculations.
Between 2015 and 2024, ships constructed in the 1990s accounted for 35% of the total number and 62% of deadweight tonnage (DWT) recycled. Meanwhile, shipbuilding in the 2000s increased by 31%, translating to a 115% rise in DWT.
Consequently, vessels from this more recent era are anticipated to dominate recycling efforts moving forward. Surprisingly, only 3% of ships and 5% of DWT from the 2000s have been recycled to date, compared to 20% of ships and 67% of DWT from the 1990s.
Notably, the bulker, tanker, and container ship sectors comprise the bulk of future recycling potential, accounting for 91% of DWT. Despite this, they represent only 53% of total ships, with general cargo and fishing vessels contributing nearly equivalent numbers.
In terms of recycling locations, Bangladesh, India, and Pakistan have emerged as the leading destinations, handling 86% of DWT and 58% of recycled ships. Their dominance, especially post-2017 after China reduced its international ship recycling, is expected to persist.
Meanwhile, while alternative recycling projects are in development, it is anticipated that South Asia will remain the primary area for ship recycling activities. The record high for ship recycling was set in 2012, with nearly 1,800 vessels and 60 million DWT recycled.
Projections indicate that from 2027 onward, annual recycling volumes could surpass that record. Nevertheless, actual recycling figures may fluctuate based on market conditions—strong demand might reduce recycling rates, while weaker markets could lead to increased recycling as operators seek to phase out older, less efficient vessels in light of greenhouse gas emission regulations.
Ultimately, ship recycling is likely to grow substantially while facing the challenges of adhering to stricter compliance standards mandated by the Hong Kong convention.