Indian subcontinent ship recycling market hits rare May supply squeeze
The Indian subcontinent (especially India and Pakistan) ship recycling market has entered a rare period of inactivity, with Wirana Shipping’s latest market outlook report showing hardly any new recycling candidates circulated during the week and no vessels currently waiting to be beached in India and just one vessel waiting to be beached in Pakistan.
The report points to a market where recyclers remain ready to buy, but owners are still finding commercial reasons to keep older vessels trading. It also cautions that there may be a break in LNG tonnage that were trickling for recycling so far and it may take longer to reach the recycling market than previously expected, with steam turbine LNG carriers benefiting from current gas supply disruption, high charter rates and a shortage of available LNG vessels.
Mr Rakesh Khetan (pictured), CEO of Wirana Shipping, said: “For Indian ship recyclers, especially, it is a tough period, where recycler interest is still there, but freight earnings, second-hand values and geopolitical disruption are delaying end-of-life decisions. The market is not short of buyers but short of vessels. Steam turbine LNG vessels also remain longer-term recycling candidates, but some may find short-term employment while current disruption supports charter demand. That window could close once Middle East tensions ease.”
Wirana Shipping’s market outlook links the shortage of candidates to resilient conditions in several shipping segments. Dry bulk charter rates improved across all sizes during the week, while the container market saw firmer spot rates in some regions and continued demand for period charter and second-hand tonnage. Tanker rates softened across clean and dirty markets, but this is far from producing any meaningful flow of vessels into recycling.
At the same time, steel weakness is adding pressure in key recycling destinations. In India, local steel plate prices fell by a further USD 9 per metric tonne this week, taking the total decline to USD 23 per metric tonne over three weeks. Local scrap, imported scrap, semis and finished steel products also moved lower, while Bangladesh remains under pressure from slow finished steel demand. Pakistan remains firmer for now and Turkey has improved offers.
Mr Khetan added: “The recycling market is being pulled in different directions. Steel sentiment is weaker in some destinations, recyclers still want tonnage, and owners are holding on to vessels where trading opportunities remain. Until charter markets soften more clearly or geopolitical disruption eases, the supply of recycling candidates is likely to remain tight.”