Ship Recycling: Will Pakistan Return to Market?

Sub Levels

T.The ship recycling market could be further accelerated by the rumored return of Pakistan. Shipbuilder Clarkson Pratow Herath said in the latest weekly report, “Interesting news broke within the industry this week that Pakistan could soon return to the bidding table.” The Pakistani rupee edged higher against the US dollar in first trade this week on the back of a funding deal from the International Monetary Fund (IMF). This could be important for the recycling industry as it will again provoke competition from its Bangladeshi and Indian counterparts for what is clearly a ‘non-green’ unit. The general view is that there will be a great demand for tonnage sourcing from recyclers after the major domestic disasters and the restructuring plans that are likely to follow with this financial assistance.” said the shipbroker.

Clarkson Pratow Eras also said, “Among other regions, Bangladesh appears to be the most stable region for Indian submarines.” Although continental, ongoing letter of credit issues still surface. Price levels out of India softened this week, not only due to the effects of the current monsoon season, which creates seasonally negative sentiment, but also due to the effects surrounding the sluggish local steel market. The price level is somewhat uncompetitive compared to its Chattogram counterparts. Moving west, the Turkish market has received some proposals for EU-approved recycling, but this again poses capacity problems, and such businesses could stagger deliveries, increasing the value of the Turkish lira. Further depreciation against the US dollar is expected. The market may drop slightly during the summer. However, if supply slows, we may see an improvement towards the end of the summer holiday season,” the shipbroker concluded.

Meanwhile, GMS, the world’s leading ship cash-buying firm, said this week, “Many subcontinental shipyards are still closed after the Eid holidays, and mixed with the ongoing monsoon season, a complete shortage of ships is becoming a serious problem.” It’s causing trouble,” he said. As we head into the third quarter of 2023, it’s certainly been another lethargic, inactive week (most of the year so far) for recycle sales, and the prices they’re offering are currently at around $1,000. It is well below market expectations in 2019 and will soon rebound. Not likely. As such, before proposing further candidates, most cash buyers and (especially) shipowners have decided to continue monitoring the market for further stability and a better pricing response. On the other hand, after several volatile quarters, fundamentals now seem to have leveled out across the Indian subcontinent and also in the Turkish recycling market, with steel prices and currencies (except Pakistan) temporarily It seems to be a dance floor. peace.

Additionally, Pakistan and budget-expired Bangladesh continue to lack viable letters of credit (L/C) and loans, pushing prices and demand down again as Bangladesh Central Bank seeks to impose tighter spending limits. are doing. Part of precious US dollar reserves. Overall, as the severe tonnage deficit continues, owners with units nearing recycling age are seriously reconsidering putting their ships back into service, with the tonnage deficit getting worse all the time. The monsoon is the only silver lining for subcontinental markets, and it looks set to be a mild July (and possibly August) for the industry as logging activity stalls.”
Nikos Roussanoglou, World Greek Shipping News

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