Bangladesh has again been placed in the top world position in ship recycling as the country recycled more than one-third of the world's ships, the United Nations Conference on Trade and Development (Unctad) new report said.
According to the report, the country recycled 2.8 million tonnage of ships, which was 37.2 percent in the world in 12 months up to January 2023.
In 2022, Bangladesh witnessed a 65 percent fall in ship breaking amounting to 2.8 million from 8.02 million in the previous year, said the report titled “Review of Maritime Transport 2023” published on Wednesday.
However, among the total ship recycling, oil tankers were 50.4 percent. Others were 41 percent from Bulk carriers, 2 percent from Ferries and passenger ships, 1.9 percent from Chemical tankers and 1.1 percent from General cargo ships, said the report.
These figures were around 57 percent from oil tankers and 25 percent from bulk carriers and 9 percent liquefied gas carriers in the previous year respectively, the report mentioned.
Some disruption at ship recycling yards, including financial pressures in yards in Bangladesh constrained recycling activity, were mentioned as the cause in the report.
In 2023, interest in ship recycling picked up as shipping market conditions softened and issues relating to letters of credit in Bangladesh eased.
As a result, more recycling is anticipated in 2023 as shipowners renew and upgrade their fleets to comply with new IMO GHG emission regulations.
More containerships are likely to be recycled in anticipation of the massive influx of new builds expected in the coming years, and reflecting lower freight rates.
The ship recycling market is expected to become more volatile, influenced by the IMO EEXI and CII regulations, and their impact on market dynamics.
Factors such as speed reduction and removal from service for ship retrofitting will play a role in shaping the market, said the report.
In 2022, worldwide 7.5 million gross tonnes, representing less than 0.5 percent of the total active fleet, were sent for recycling. Despite more stringent environmental rules and rising steel costs, market conditions took precedence, with shipowners eyeing the peaks in freight rates. Demand for older tonnage increased the average value of older vessels.
The report mentioned the development of significance for ship recycling as the coming into force of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (the Hong Kong Convention) for Bangladesh and Liberia, which deposited their respective instruments of accession to the Convention in June 2023.
The Convention will enter into force on 26 June 2026.
