Global ship recycling activity experienced a notable slowdown this week as the Chinese New Year holiday period commenced, according to cash buyer GMS. Following a surge in recycling tonnage at the beginning of 2025, the market has seen a noticeable decline in sales and purchase activity.
"It is the Year of the Snake, and it is indeed expected to be a far busier one than the preceding years, with record low volumes of supply and an ensuing inertia that eventually led to the shuttering of yards across the major global ship recycling destinations in 2024," GMS stated.
GMS warned that a continued decline in supply could put further pressure on recycling markets, potentially impacting ship owners who may be forced to accept lower prices for their vessels.
Since October 2024, Indian and Bangladeshi yards have been the primary recipients of recycling tonnage, following the withdrawal of Pakistani recyclers from the market due to a domestic financial crisis. However, Gadani recyclers are now showing signs of returning to the market, focusing on dry bulk vessels (Panamax and handy bulkers) and LNG tankers.
"Week 6 is likely setting itself up to be the pivotal point of global Tariff Wars of 2025. This also seems to be affecting the performance of the U.S. Dollar, which although seems to have made minor improvements against most of the major ship recycling nation currencies by the end of the week, actually started to decline across the board early in the week with the uncertainty of the upcoming tariffs, which even resulted in flattening steel plate prices at all ship recycling nations, except India where expectedly, they declined," the statement continued.
GMS highlighted that tariffs on Chinese steel pose a significant concern for sub-continent ship recycling markets. The potential dumping of surplus steel from China could significantly impact demand and vessel pricing in the coming months.