AN ANTICIPATED surge in ship recycling in 2024 failed to happen as the diversion of ships from the Red Sea created a cargo capacity crunch across most vessel sectors throughout the year.

Lloyd’s List Intelligence data shows that a total of 324 merchant ships were recycled during 2024 with a combined gross tonnage of 4.6m.

This was the lowest level of ship recycling since 2005, and more than 30% down on the gross tonnage recycled in 2023, itself a stunted year for ship demolition.

Rising vessel fleet age profiles, due to relatively low levels of investment in new ships during the 2010s, and increasingly stringent emissions regulations was expected to provide a big rise in ship demolition activity during 2024, following two years of very low levels of recycling.

But strong freight rates across most sectors, because of Red Sea diversions, and strong growth in cargo volumes particularly in the liner shipping segments, meant vintage tonnage has been much in demand and has remained in the trading fleet.

While the sale of old tankers for shadow fleet trading dropped considerably in 2024, compared with 2022 and 2023, demand for old crude oil tankers to operate in sanctioned oil trades continued.

Just 17 crude oil tankers and product tankers were recycled during 2024.

Low levels of investment in new ships during 2010s has seen secondhand values on the rise since 2021, with values of vintage vessels usually in excess of scrap sale prices.

The first very large crude carrier recycling sale since 2022 was reported in December 2024, while bulk carrier and containership scrap sales have been focused on smaller or very old units.

In 2024, the general cargo segment provided 30% of recycling volumes in terms of ship numbers.

Containerships and bulk carriers provided 16% and 15%, respectively, in ship number terms, accounting for 54 vessels and 50 ships.

Relatively high prices, compared to average historic levels, are being offered by ship recyclers, partially due to a shortage of candidates coming on the market.

Meanwhile. the strong US dollar and political instability has been affecting most ship recycling nations with government-controlled banks having limited the issuance of letters of credit, reducing the ability for ship recyclers to buy larger ships.

Cheap imports from China have reduced the demand for recycled metals from ships in the Indian subcontinent with governments now raising import tariffs on imported Chinese steel.

With some 1,300 tankers and 1,250 bulk carriers of above 20 years of age and 680 containerships still in service which were built before 2005 ship recycling is expected to pick up from this year. More stringent emissions regulations entering in to force in 2025 will favour modern ships and make some of the oldest ships obsolete.