Ship Recycling Market Sentiment Improving Despite Lack of Available Tonnage

Despite the currency headwinds and a softer steel market, overall sentiment stayed firm, supported by steady buyer appetite and improved local market confidence. Steel plate prices corrected by approximately 2–4% across most categories; however, demand for recycling candidates remained resilient, underpinned by the dearth of available recycling tonnage”. Meanwhile, “the local market in Bangladesh remains slow, although some activity has started to return. With elections expected in February and increasing expectations of a stable government, buyers have begun to re-enter the market to evaluate potential purchases. Sellers are advised to remain cautious when considering larger vessels, as financing remains difficult in this location and can still hinder the successful execution of such transactions. In Pakistan, “buyer presence remains limited, with only a small number of participants active in the market. However, buyers have been unable to secure meaningful tonnage, largely due to their inability to compete with pricing levels being offered in India and Bangladesh. Unless there is a significant improvement in market infrastructure and competitiveness, Pakistan is expected to remain behind the region in terms of achievable pricing. Finally, in Turkiye, import levels softened by around USD 1 over the week, while conditions in the local market remained broadly unchanged. Overall, Turkey continued to follow its typical trading pattern, with limited momentum and no material shift in underlying sentiment or pricing fundamentals, leaving the market largely stable with little of note to report”, Best Oasis concluded.

Meanwhile, in a separate report, shipbroker Intermodal said that “the recycling sector experienced modest activity, constrained by a declined number of candidates, with the Chinese New Year expected to further temper activity. The Indian market showed some stability, maintaining the firm sentiment of the previous week. Although there is interest in the acquisition of vessels, this appears to be mainly supply driven, largely due to the scarcity of available candidates, as Indian recyclers currently remain less competitive than their subcontinent neighbors. On the macroeconomic side, while uncertainty remains over a potential trade deal with the United States that could mitigate U.S. tariffs, India has finalized a historic trade agreement with the European Union, enabling free trade between India and the 27-nation bloc. The conditions at Chattogram remained largely unchanged from last week, with the market at a standstill and sentiment weighed down by weakening conditions in the steel market.

Looking ahead to the February elections, some market participants are cautiously exploring potential transactions, hoping for a more stable political climate however this has yet to translate into meaningful interest. The outlook remains weak, with activity likely limited to occasional deliveries that cannot be diverted elsewhere. Ship recycling activity in Pakistan was subdued, despite buyer interest. The market is constrained by a shrinking pool of candidates, a situation unlikely to ease in the next weeks as the Chinese New Year is set to delay the arrival of Chinese tonnage. Meanwhile, the local steel sector continues to benefit from a decline in Iranian imports, showing renewed strength. Progress has been made on the compliance front, with a second shipyard achieving HKC certification, bringing the total number of compliant yards to two. In Turkey, Aliaga’s anchorage is busy following the recent arrival of European Ro/Ro vessels. Beyond this, the sector is attempting to build momentum, but sentiment remains affected by a weakening steel market and the continued depreciation of the Turkish Lira against the U.S. Dollar”, the shipbroker concluded.