GMS Week 02 – SANCTION STATION!

This week President Biden imposed sanctions on China’s national shipping company, COSCO, based on the company became part of the Chinese military, blacklisting its energy/tanker division. In fact, the 80-year-old took a crackdown this week, with the US reportedly also sanctioning more than 180 ships and dozens of entities in Russia, in what turned out to be an unprecedented crackdown on Russia in the final days of his presidency. . While experts in the field are quick to point out that China’s COSCO sanctions will likely not have the same impact as the 2019 sanctions, energy costs for countries in the COSCO supply chain will likely face inflation headwinds for a while. , huge impact. the impact has yet to be realized. Even oil futures reportedly faltered towards the end of the week as the direct impact on COSCO and Russia sent oil prices soaring to US$ 76.57/barrel, a level not seen since last October. Additionally, the Baltic Dry Freight Index of dry bulk commodities jumped 8.2% on Friday, marking the second consecutive week of interest rate hikes. However, recycling traffic in India and Bangladesh continues to surprise and impress (especially in India), with the water region reporting a busy week in terms of arrivals and deliveries. Pre-existing global economic conditions also continue to persist along with current developments because the US Dollar continues to hit the currencies of recycling countries and records significant increases every week – including this time. Even steel prices that influence the ship recycling market including domestically weakened this week, with China leading the way in lower/cheaper steel prices that are still available globally. To what extent India’s steel tariffs will help Alang’s performance, while Pakistan’s tariffs are just one step away from reducing, remains to be seen.

Meanwhile, ship recycling countries again experienced mixed performance over the past week as there was a stark difference in terms of actually applicable candidates compared to a very quiet 2024, which saw the lowest volume of overall units sold for recycling repeated in more than a decade. It is true, and as noted above, several large, high-profile LDT vessels were offered for sale this week, including a number of LNG carriers and Panamax bulk carriers, after a slower period of time where specialist small(er) LDT units were available. bulk carriers, and coral reefs remain a staple of the continent’s ship recyclers for most of the year. It will therefore be interesting to see what ultimately happens to these very old and sanctioned assets, which have nowhere to go, or will they be left to rot/become an abandoned danger at sea? With the HKC also set to come into force in the middle of this year, and the workforce yet to quickly prepare and align their operations with the convention’s requirements, it is likely that 2025 will be another eventful year characterized by extreme volatility. and unpredictable movements/events that can change the market in an instant, and financial concerns for yard companies that have diverted or even borrowed funds for yard improvements and may experience persistent tonnage shortages that hinder the recovery of their financial obligations. Therefore, prices are likely to exhibit volatility throughout the year, characterized by sanctions that will impact ship supply, especially in the short term. While ship recycling destinations on the continent remain relatively the same compared to last week without much fanfare compared to this week, not much has changed, even in Turkey, where the only movement reported this week was in the Lira. Live 2025.

For Week 2 of 2025, the GMS Market Ranking/ship indications are as follows.