The ship recycling industry is experiencing a profound downturn, with transactions grinding to a near halt. Prices have dropped over $100 per light displacement ton since their peak in 2024, leading to a majority of sales occurring below $ 500 per LDT. Bangladesh and Pakistan are particularly impacted, suffering from economic constraints that limit available letters of credit and discourage negotiations. This decline reflects a broader hesitance among buyers, exacerbated by the geopolitical uncertainties and their potential impact on the global economy.
In addition, while currencies in India and Pakistan have remained relatively stable, both Bangladesh and Turkey have reported significant declines. Local steel plate prices have stagnated across the region, further indicating a troubling trend. The lack of direction from Bangladesh's interim government and the ongoing issues in Pakistan, including competition from inexpensive Chinese steel, have stifled the resale of recycled steel and curtailed domestic output.
The freight markets continue to exhibit resilience, yet the ship recycling sector faces a looming supply shortage. Industry forecasts suggest that conditions may remain challenging through the first quarter of 2025, providing a brief window for sub-continent markets to stabilize before an expected influx of tonnage occurs. The intricate interplay between geopolitical strife and economic factors underscores the complexities shaping the current global landscape, leaving many to ponder the broader implications of these developments.
