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Ship recycling market on early-year bull run

Photo: Leela Modernized ship recycling facility - Leela yard.png
Leela Ship Recycling yard
The recycling market has begun 2021 in strong form, with rising demand for steel pushing up prices and recycling yards keen to procure more tonnage.

According to an update from GMS, the world’s largest cash buyer of end-of-life ships, Bangladesh yards are leading the drive, paying typical prices of $480 per light displacement ton (ldt) for container ships, $470 for tankers, and $460 for bulk carriers.

Facilities across the Indian subcontinent are now paying prices well into the $400s, according to GMS, with Pakistani recyclers about $20 per ldt behind Bangladesh, and Indian breakers a further ten dollars lower. Turkish prices, though always much lower, are also rising.

Containerships could yield $280 per ldt, according to GMS, with five dollars less for tankers, and ten for bulk carriers. However, prices generally are tempting for many owners, GMS noted, particularly those who face the prospect of costly ballast water installations in the near term.

In a wider context, shipping’s green transition is likely to underpin a clear-out of older ships, many of which are likely to become increasingly unattractive as an era of greater transparency enables major charterers to focus more closely on ship efficiency.

This trend is likely to accelerate as the IMO’s Existing Ship Efficiency Index (EEXI) and Carbon Intensity Indicator (CII) reveal more background on individual ship performance in the months ahead.    

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