Recycling: stricter rules limit site capacity, while overcapacity increases

As containerized maritime transport projects toward a prolonged phase of overcapacity, the market theoretically expects a return to demolition to rebalance supply. Problem: Recycling capacity is constrained by regulations, which can hinder the natural “decongestion” of the fleet.

The paper recalls that the Hong Kong Convention (adopted in 2009) came into force much later, with the ambition of imposing safer and cleaner practices. But the European Union maintains a strict line: shipyards using certain dismantling methods (particularly those deemed risky for workers and the environment) are not recognized, and the EU is even considering a unilateral strengthening of the framework.

In this context, several analysts observe a discrepancy: the need for demolition could increase, but fleet “outflows” remain low. Projections suggest a significant increase in the volume of scrapped ships in the future, especially if market factors (such as a potential drop in rates or a return to shorter routes freeing up tonnage) intensify the pressure on older vessels.

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