The conclusion of 2023 presents contrasting emotions for the global ship recycling industry. Despite increased ship deals compared to 2022, insufficient exits hindered balancing global fleets. Price fluctuations, from highs surpassing $600/LDT to sharp drops of $150/LDT during monsoons, inflicted losses on Ship Owners and Recyclers. Financing challenges persist in Pakistan and Bangladesh, although optimistic signs in steel prices and currency fluctuations offer a glimmer of hope as 2023 bids farewell.
As the curtains draw on 2023, the international ship recycling community grapples with a kaleidoscope of sentiments. While this year witnessed a relatively higher number of deals compared to the lackluster 2022, the industry fell short in achieving the necessary number of permanent exits to balance the global fleets.
The journey of prices throughout 2023 has been tumultuous, oscillating between peaks exceeding $600/LDT and a swift plummet of about $150/LDT during the traditional summer and monsoon periods. This rollercoaster ride inflicted substantial losses upon Ship Owners, Cash Buyers, and Vessel Recyclers, perpetuating their yearning for a brighter future in this sector as they bid adieu to 2023.
As the new year beckons, a succinct overview reveals persisting financing challenges in Pakistan and Bangladesh. Domestic banks in these regions remain reticent in sanctioning fresh financing or L/Cs for new vessel purchases, despite a firming demand and gradual clearance of domestic yards.
However, amidst these challenges, a faint flicker of optimism emerges from the stability in international steel and commodity prices. Many speculate that vessel prices have bottomed out across sub-continent markets. Additionally, fluctuations within an acceptable-to-positive range in currencies coupled with potential IMF loans may alleviate the funding hurdles besieging Bangladeshi and Pakistani banks.
In the concluding week of 2023, GMS demo rankings and pricing denote varying sentiments across different locations. The sentiment in India remains weak, with pricing at $510/LDT for Dry Bulk, $530/LDT for Tankers, and $550/LDT for Containers. Similar sentiments persist in Pakistan and Bangladesh, while Turkey displays signs of improvement with pricing at $340/LDT for Dry Bulk, $350/LDT for Tankers, and $360/LDT for Containers.
As the year draws to a close, GMS extends warm wishes for a Happy New Year and bestows hope for a fruitful 2024 upon its readers.
The conclusion of 2023 encapsulates the ship recycling industry's rollercoaster journey, marked by fluctuating sentiments, price turbulence, and persistent challenges. Despite the tumultuous landscape, a glimmer of hope arises from stable international steel prices, currency fluctuations, and potential IMF loans, painting a cautiously optimistic outlook for the industry's future.