IN THE two months since Hitesh Vyas, Middle East vice-president and green recycling coordinator at the Singapore-based cash buyer Wirana, recorded his first of six podcasts for Lloyd’s List, a 60-day Memorandum of Understanding intended to reopen the Strait of Hormuz has ended without a settlement.

In June, he had described that situation as “pivotal” to the sector but reports that, although there has been “a marginal improvement in some tonnages coming out,” he says now that “broadly the situation remains the same”.

Nonetheless, he reports some significant tonnages being circulated and several demolition deals finalised, including for a number of sanctioned tankers that generally head to Indian recycling yards.

He also discusses price movements during the past two months and links them to developments in local steel plate prices; in one region, both ship values and plate prices are up, while elsewhere ship values have been stable while plate prices have fallen.

He singles out LNG carriers as a particular ship type that is coming on to the market and explains why: steam turbine LNGs have high-fuel consumption and high methane, making them costly to run and creating difficulties in complying with environmental rules.

Their return to the recycling market following a pause since last year that reflects a short-term market situation that created demand for these ships, but the arrival of more efficient newbuildings has contributed to bringing that situation to an end, he explains.

EU Ship Recycling Regulation

Vyas also speaks about two potentially significant developments that could affect the recycling sector globally and permanently.

First, the European Union is moving towards including Asian yards on its list of approved yards under its Ship Recycling Regulation. This sets out standards that yards must meet before European shipowners can use them to recycle their tonnage. Although not explicitly stated in the regulation, it has generally been understood that the EU would not approve yards that use beaching techniques.

But now, three Indian yards operated by two companies have been acknowledged as meeting the EU SRR’s technical requirements, opening the way towards them being included on the next list of approved yards, due in October. A public consultation closes at the end of August, after which the EU Commission will review those inputs before the Ship Recycling Regulation Committee — with representatives from EU member states — decides whether to approve these yards.

Vyas welcomes this development, which he says is the culmination of a decade of development and, in the podcast, he considers whether the yards are likely to succeed in their application.

October will also be an important moment for a second piece of recycling regulation. That is the deadline for feedback on a proposal aimed at resolving differences between the IMO’s Hong Kong Convention and the UN’s broader Basel Convention, both of which apply to ship recycling.

In the podcast, Vyas outlines the options that are on the table and in his next podcast, which will be published on October 28, he will explore the implications of a decision — expected next April — on which regulation should take precedence.