Post-Ramadan Resurgence for Indian Ship Recycling Market

The ship recycling markets in the Indian sub-continent have experienced an unexpected surge in activity following Ramadan, according to GMS, a leading cash buyer.

"Vessel prices across the various destinations seemed to have concurrently enjoyed varying degrees of an uptick this week on the back of which some eye-opening sales were seemingly concluded into the various sub-continent locations."

Despite this increase, it is surprising given that the currencies of the recycling destinations experienced significant fluctuations against the U.S. dollar this week, GMS noted.

This week, a Sinokor container ship was sold for USD 600 per light displacement tonnage (LDT), which unexpectedly set a benchmark and spurred several shipowners to put their container ships on the market, hoping to achieve similar prices. 

"Accordingly, frantic offerings ensued and although USD 600/LDT was not breached, several deals were reportedly concluded at these firmer overall levels," GMS explained.

The surge in container ship sales came as part of a broader wave of vessel offerings that included older bulkers and general cargo ships from Far Eastern and Chinese markets, which remain available for recycling. This increased supply coincides with a dip in freight rates, contrary to the strong and sustained charter market seen since the beginning of the year.

Despite the introduction of cheap Chinese billets into the global and Indian markets, punitive tariffs have effectively prevented a repeat of the 2015 crisis. 

"Indeed, the Indian market has jumped back into the picture this week, with some impressive offers on this most recent batch of containers, securing their vessels for dormant Alang yards, while Bangladesh once again picks up a majority of the rest. As Pakistani recyclers rethink their price ideas and Turkey spends the week invisible in celebrations, it has certainly been an interesting overall week for the industry," GMS added.