Scarcity of recycling tonnage pushes Indian yards towards highly speculative bids, says Wirana Shipping
Indian ship recyclers are increasingly prepared to bid at levels that could result in substantial losses based on current prices as competition for a limited number of end-of-life vessels intensifies, according to Wirana Shipping, one of the world’s oldest and largest cash buyers of vessels for recycling. Indian ship recycling offers have climbed by as ...
Indian ship recyclers are increasingly willing to bid at potentially loss-making levels due to the scarcity of end-of-life vessels in the market, according to Wirana Shipping, a leading buyer of vessels for recycling. Prices for recycling offerings have surged by up to USD 30 per long ton of cargo over the past three weeks, driven by a lack of available vessels for recycling.
In its latest weekly market report, Wirana Shipping highlighted that high-standard recycling facilities are showing aggressive bidding behavior for the limited supply of recycling candidates, even when the economics suggest they could incur substantial losses.
Rakesh Khetan, CEO of Wirana Shipping, explained that the scarcity of vessels has become as important as the value of the steel itself in determining prices. He added that recycling facilities have invested heavily in infrastructure, safety, environmental standards, and workforce development, necessitating a steady flow of vessels to maintain their operations.
When the supply remains constrained for an extended period, competition for suitable candidates intensifies, potentially leading to prices that become disconnected from the actual recycling economics.
The current shortage has occurred amidst relatively strong freight and second-hand markets, which provide owners with viable alternatives to recycling. Despite these factors, recycling supply in India is expected to remain slow to moderate.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.