Market Prospects for Ship Recycling Are Getting More Effective
Posted on Dec 06, 2024 at 08:12 PM
GMS reports that despite President Trump's 25% tariffs on China, Mexico, and Canada, the US economy is still growing, as inflation falls to global levels and the US dollar strengthens against most ship recycling nation currencies.
In India, a minor post-festival demand increase has brought stability, but its sustainability needs to be better.
Ship Recycling Market Dynamics
According to Best Oasis, a leading cash buyer of ships, recycling markets in Turkey and South Asia have been muted recently, showing erratic patterns that suggest more impulses are required to boost the market.
The Israeli-Hezbollah truce eased trade tensions, leading to the appearance of many beach-worthy, yet employed women at ship recycling waterfronts, especially in Alang.
Notably, Bangladesh's steel mills face operational challenges, leading to low demand and trading, and stable prices. Pakistan's market remains calm due to import reliance and low local scrap supplies. The Turkish market shows minimal activity, with no signs of change shortly.
Best Oasis predicted a surge in purchasing activity in November and December, potentially impacting price dynamics, and a potential change is expected soon.
The top maritime training academy UK courses offer crucial instruction on professional skill development and address the intricate issues facing the sector today for individuals wishing to expand their knowledge in this field.
Donald Trump's return to the White House has set the stage for potential economic changes, including tax cuts to boost domestic manufacturing, heavy tariffs to discourage outsourcing, and a shift towards green energy over fossil fuels.
Moreover, Trump's policies may boost the US economy, but they also raise risks of rising prices, inflation, and high interest rates, and could impact labor dynamics, international trade, energy markets, and geopolitical alliances.
Bangladesh's & India's Ship Recycling Market
With notable cash buyers and recycling associations as founding members, BIMCO has established the Ship Recycling Alliance to expedite the implementation of the Hong Kong Convention, which is set to take effect in June, according to a separate note from shipbroker Intermodal.
Meanwhile, a large number of industry players attended last week's Bahri Week in Dubai and the Tradewinds Ship Recycling Forum in Copenhagen.
Bangladesh's market activity has decreased due to a challenging economic environment, with the IMF revising the GDP growth forecast to 4.5% from 6.6%. Political instability, high inflation, and economic slowdown have reduced domestic steel demand, impacting the ship recycling sector.
Furthermore, Bangladesh Bank has introduced a letter of agreement process to streamline industrial imports and reduce reliance on Letter of Credit (LCs), but weak steel demand in India hinders market improvement.
The Indian economy is expected to grow by 7% in 2024, largely due to improved consumer spending and infrastructure investments, but inflationary pressures, geopolitical tensions, and extreme weather events may persist.
Alang shipbreakers recycle container vessels, steel plate prices drop by $6 per ton, ship demolition prices remain unchanged, Pakistan struggles to secure IMF $7 billion bailout package.
The ship recycling sector faces challenges like uncertainty, limited funds, and difficulties opening LCs, with Gadani being less competitive and despite financial support from China, weak economic fundamentals hinder recovery.
Chinese companies are preparing for a stimulus plan, predicting an impact on steel plate pricing and global trade trends. Trump's tariffs have sparked economic responses, boosting optimism for rival countries' pricing.
According to GMS, vessel price, supply, and demand should all increase in the upcoming year.
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