Shipowners urged to act as Bangladesh recycling prices surge, warns Wirana

Shipowners considering recycling older vessels have a narrow window to secure higher prices in Bangladesh, following an unexpected surge in offers despite continued weakness in the country's domestic steel market, says Wirana Shipping.

The oldest global vessel cash buyer has warned that the current price levels may prove short-lived, with limited vessel availability driving competition among recyclers and pushing offers beyond levels that can be sustained by underlying steel market conditions.

According to Wirana's latest weekly market report, a dry cargo vessel was sold for recycling in Bangladesh at approximately eight per cent above the previous week's price levels. The increase comes despite sluggish domestic steel demand, with local mills remaining cautious about purchasing and stockpiling materials. Wirana believes similarly high prices may only be achievable for another three or four recycling candidates, creating a potentially valuable opportunity for shipowners already contemplating vessel disposals.

Rakesh Khetan, CEO of Wirana Shipping, said: “What we are seeing in Bangladesh is an unusual situation where recycling prices are rising despite weak demand for steel. Recyclers are extremely keen to acquire vessels, but there are simply not enough candidates entering the market.

“This competition is creating opportunities for shipowners to achieve prices that may not be available in the coming weeks. However, these levels are not supported by the underlying steel market, and we do not believe they can be sustained indefinitely.”

Bangladesh's recycling market has also experienced disruption from festival holidays, with trading taking place on just two days during the reporting week. Prices for local steel plates, local scrap and imported shredded scrap remained broadly unchanged.

The wider international shipping market continues to restrict the availability of recycling candidates, with relatively strong charter earnings encouraging owners to keep older vessels trading rather than send them for demolition.

Mr Khetan added: “Shipowners need to assess the commercial realities carefully. Waiting for prices to rise further could mean missing an opportunity that has been created by a temporary imbalance between supply and demand.
For owners who have already decided to recycle, the coming days could offer particularly attractive conditions. Timing will be critical.”