A top-tier Turkish ship recycler predicts a brewing perfect storm could result in a deluge of demolition-bound vessels.
Dimitris Ayvatoglu, Leyal Group’s head of business development, told the TradeWinds Ship Recycling Forum in Copenhagen on Tuesday that a trifecta of circumstances could improve the moribund sector that this year is forecast to recycle the lowest volume of tonnage in decades.
Noting that the average age of the global commercial fleet is at the highest level in recent history because strong markets are delaying scrapping, he said many ships will soon have to be decommissioned.
Ship recyclers had been expecting a deluge of older vessels that successfully rode the pandemic wave for several years.
But just when it seemed the wave had run its course, the Red Sea crisis and demand for older tankers from dark fleet players kept these ships trading far away from recycling beaches.
Ayvatoglu expects that to change: “In the US, we see that there will be a change in the policy with respect to dealing with the regional conflicts, so one has to now evaluate the impact of political change to the trade of certain ships.”
He also said potential new US tariffs on imports could impede trade, leading to heightened scrapping levels.
“The ships that were built in the early 2000s, which were much bigger than their predecessors, are coming of age. These are ships that are now 20 years old or older,” he said.
Ayvatoglu also expects younger ships will be pushed out of the market due to increasingly stringent emissions regulations.
“We are seeing this perfect storm that may flood the market, and we as recyclers are looking and hoping for that to come sooner rather than later,” he said.
Despite this, Ayvatoglu expects scrapping levels in the first half of 2025 to remain low.
International ship Recycling Association president Konstantinos Galanis told the forum that when the recycling market rebounds, it is unlikely to come in the form of one large wave.
He expects a series of smaller waves as individual sectors begin to release ships at different times.
