Bangladeshi ship recycling makes a comeback

Author: Sevgul Gasimzade
Published: 28.02.2023 11:12

BANGLADESHI ship recyclers are becoming increasingly competitive once again as end buyers have sought alternative sources of financing following letter of credit restrictions imposed by the country’s government.

“It is the Bangladeshi market that has been impressing everybody of late, with a lot of pent-up demand being realised and even news of some choice purchases at decent numbers on units that have managed to receive letter of credit approvals,” said ship cash buyer GMS.

With only a handful of Bangladeshi buyers currently able to secure financing in order to open letters of credit via state banks, due to controls on US dollar reserves, some buyers are using private financing channels to secure much-needed tonnage, as recycling yards having emptied over the past six months.

“Ongoing International Monetary Fund loan discussions are expected to bring in about $2bn-$3bn of foreign capital into Bangladesh, but these discussions have yet to be concluded,” said GMS. “As such, end buyers have apparently been successful on select vessels through non-governmental banks.”