Ship recycling industry to grow to 3.8-4.2 million GT by 2025: report | the news

The ship recycling industry in India is expected to grow at a CAGR of around 10% in the period 26-28, he said, with the cooling of the Baltic Dry Index, the stabilization of heavy scrap prices and the increase in operations of obsolete ships. , suggesting that after AC25 more ships will enter the waste recycling market

According to Shah, countries with developed infrastructure and green recycling facilities are expected to attract a large share of ships in the future.

India's share in the global recycling industry was around 27 percent in the past, before rising to around 33 percent in CY22 and CY23, reflecting an increase in its contribution amid the global recession.

In terms of volume, in CY22 and CY23, India broke 2.26 and 2.47 million GT respectively, CareAge said.

Ship recyclers are supported by a favorable financial structure due to low debt levels in ship recycling operations, low fixed expenses and contractual employees in the operations. Furthermore, the convergence of factors such as stable freight and steel scrap prices, along with an expected increase in the availability of obsolete ships, suggests that ship recycling activity will continue, he said.

It also stated that the decline in global ship recycling activities, combined with the steady increase in shipping capacity in recent years, still highlights the growing number of obsolete ships.

As newer, more efficient ships are introduced, older ships become increasingly uncontrollable. This trend creates a growing need for ship recycling as operators look to retire older ships whose maintenance is no longer economically viable, the classification agency said.

According to the report, activity in the Indian ship recycling sector faced a slowdown in FY23 and FY24 amid rising heavy melt scrap prices.

Heavy scrap prices in Gujarat's Bhavnagar increased from Rs 28,800 per tonne in August 2020 to Rs 54,400 per tonne in April 2022, driven by rising demand for steel amid supply chain disruptions and recovery efforts post-pandemic economy.

However, after the peak, scrap prices started falling, settling at Rs 39,900 per tonne in December 2023. From January 2023, prices stabilized between Rs 36,000 and Rs 44,000 per tonne, it said.

This recent stabilization suggests that the market has adjusted to post-pandemic conditions, providing a more predictable cost structure for scrap-dependent industries, CareAge said.

India's ship recycling industry is an important part of the global maritime sector – the top four countries – Bangladesh, India, Pakistan and Turkey – dominate the ship recycling industry, accounting for more than 90 percent of the global ship recycling volume. ships, according to ICRA.

In India, Alang in Gujarat has one of the largest ship recycling facilities in the world, with more than 140 recycling yards.