BANGLADESHI ship recyclers are becoming increasingly competitive once again as end buyers have sought alternative sources of financing following letter of credit restrictions imposed by the country’s government.

“It is the Bangladeshi market that has been impressing everybody of late, with a lot of pent-up demand being realised and even news of some choice purchases at decent numbers on units that have managed to receive letter of credit approvals,” said ship cash buyer GMS.

It reports Chattogram ship recyclers are offering prices of more than $600 per light displacement tonne for the first time since February of the past year. Elsewhere, competing markets, chiefly India, are increasingly struggling to keep up.

With only a handful of Bangladeshi buyers currently able to secure financing in order to open letters of credit via state banks, due to controls on US dollar reserves, some buyers are using private financing channels to secure much-needed tonnage, as recycling yards having emptied over the past six months.

“Ongoing International Monetary Fund loan discussions are expected to bring in about $2bn-$3bn of foreign capital into Bangladesh, but these discussions have yet to be concluded,” said GMS. “As such, end buyers have apparently been successful on select vessels through non-governmental banks.”

The largest vessel to have been purchased by Bangladeshi ship recyclers in several months, the 97,000 dwt bulk carrier Rio Balsas (IMO: 9034925), arrived at Chattogram on February 24, according to Lloyd’s List Intelligence data. The 1992-built ship was recently purchased from undisclosed buyers for $570 per light displacement tonne.


Elsewhere, the Chattogram ship recycling sector has purchased its first containership since 2021.


The 1998-built, 2,452 teu Amalia C  (IMO: 9166649) was owned by Greek shipowner Danaos and was bought via a cash buyer for an undisclosed price.


Also reported as sold to Bangladesh is the 1994-built bulk carrier Vadi (IMO: 9077898). This 70,000 dwt ship was purchased from Egyptian owners for $575 per LDT.

With a recently revitalised Chattogram ship-breaking market, Indian buyers are said to have lost out on a number of high-quality ships for recycling in past weeks.


Nevertheless, Indian ship recyclers are expected to soon benefit from the exemption of a 2.5% customs duty, which is presently levied on all imported ships for recycling by the Indian government.


Indian ship recyclers should also benefit from an increase in containership recycling, which generally requires Hong Kong Convention green recycling, for which India has the most compliant yards.                


Pakistan recyclers remain out of the market for large tonnage due to their inability to establish workable letters of credit, while pricing remains uncompetitive compared with their rivals in India and Bangladesh.


GMS reports that the Turkish market remains eager to take on fresh tonnage following almost a year on the sidelines.


As such, pricing levels offered by Aliaga ship recyclers have lifted by $20 per LDT in the past week.
https://lloydslist.maritimeintelligence.informa.com/LL1144114/Bangladeshi-ship-recycling-makes-a-comeback