“Between January and April 2025, dry bulk ship recycling has fallen 24% y/y, reaching a 17-year low despite a 35% y/y drop in the Baltic Dry Index (BDI). While weaker freight rates
“Between January and April 2025, dry bulk ship recycling has fallen 24% y/y, reaching a 17-year low despite a 35% y/y drop in the Baltic Dry Index (BDI). While weaker freight rates typically encourage the recycling of older and less profitable ships, high uncertainty over the demand outlook could be delaying recycling decisions,” says Filipe Gouveia, Shipping Analysis Manager at BIMCO.
Dry bulk ship recycling has been slow since the first quarter of 2021 when freight rates significantly strengthened due to a pickup in demand and congestion. Since then, rates have been supported by strong Chinese demand and longer sailing distances following sanctions on Russian coal. Rerouting via the Cape of Good Hope due to attacks on ships in the Red Sea has also contributed. However, so far in 2025, rates have fallen due to a weaker supply/demand balance.
While total ship recycling has decreased, it rose for the panamax and handysize segments which accounted for 51% and 26% of recycled capacity, respectively. Panamax freight rates have gradually weakened since the second half of 2024, contributing to more recycling. Freight rates in the handysize segment have also weakened, although to a lesser extent.
“Amid low recycling and fleet renewal in
Content Original Link:
" target="_blank">
