Bangladesh recycling prices offer temporary opportunity

Shipowners considering recycling older vessels could benefit from a narrow window of elevated prices in Bangladesh, where strong competition among recyclers is pushing offers higher despite continued weakness in the domestic steel market, according to Wirana Shipping.

The ship recycling cash buyer said limited vessel availability has driven prices beyond levels justified by underlying steel market conditions. However, the company warned that the current strength may prove short-lived, creating a potential opportunity for owners already considering vessel disposals.

“What we are seeing in Bangladesh is an unusual situation where recycling prices are rising despite weak demand for steel,” said Rakesh Khetan, chief executive of Wirana Shipping.

“Recyclers are extremely keen to acquire vessels, but there are simply not enough candidates entering the market. He added that the current competition could allow owners to secure prices unlikely to remain available in the coming weeks.”

According to Wirana’s latest weekly market report, a dry cargo vessel was sold for recycling in Bangladesh at approximately eight per cent above the previous week’s price levels. The company believes comparable prices may be achievable for only another three or four recycling candidates, as recyclers compete for a limited supply of vessels.

The price increase comes despite sluggish domestic steel demand, with local mills remaining cautious about purchasing and stockpiling materials. Festival holidays also disrupted market activity, leaving just two trading days during the reporting week. Prices for local steel plates, local scrap and imported shredded scrap remained broadly unchanged.

International shipping conditions are further restricting the supply of recycling candidates. Relatively strong charter earnings are encouraging owners to keep older vessels trading rather than send them for demolition, intensifying competition for available tonnage.

Khetan warned that shipowners should weigh current offers against the risk of waiting for further increases. With elevated prices driven primarily by limited supply rather than stronger steel demand, the opportunity may not last. For owners already committed to recycling, the coming days could offer particularly attractive conditions, making timing a critical commercial consideration.