The sanctions package that landed last week barely had time to settle before the shooting resumed. Renewed U.S. strikes and Iranian retaliation ended the recent lull, while commercial traffic through Hormuz again ran below pre-conflict levels. For Gulf-positioned recycling candidates, the immediate risk has shifted back from sanctions paperwork to passage, insurance and physical security. The strait is functioning. Normality is not.
Oil followed the escalation. Brent traded near USD 95.7 and WTI around USD 91.6 on Friday, up roughly 7% and 10% on the week respectively and reversing last week’s retreat. The market has absorbed repeated disruptions, but the inventory cushion is no longer being treated as infinite. Higher crude raises voyage and import costs across the basin just as buyers are becoming more selective.
Dry freight supplied the clearer recycling message. The Baltic Dry Index climbed to 3,488 on Thursday, its strongest reading since October 2021, with Capesizes at 6,042 and Panamaxes at 2,457. The rise is broad enough to keep ageing bulkers trading and owners patient. Last week’s principal supply constraint has strengthened, not eased. The beach is bidding against daily earnings, and daily earnings are winning.
Currencies moved in different directions. The Indian Rupee strengthened to around 94.49 against the Dollar, meaningful support for Alang’s purchasing power, while the Pakistani Rupee held near 277.42 and Bangladesh Bank’s latest available spot reference firmed to around 122.79. The Turkish Lira weakened through 48.4. Pakistan’s August inflation reaccelerated to 11.1%, while Turkey’s annual print edged lower to 31.51%. The basin’s macro picture is mixed, but India received the cleanest local tailwind.
At the beaches, physical activity continues to outpace fresh business. Several units that had been sitting in the pipeline have now converted into deliveries, while Gadani has added more hulls to its waterfront. Yet no fresh market sales were reported. Bangladesh and Pakistan have both cooled as the hottest buyers satisfied immediate requirements, while India is improving from below. The distinction remains critical: tonnage is moving through the beaches; owners are not yet feeding the next cycle.
The Bangladesh investigation left open last week has now reported. The Ministry of Industries inquiry identified shortcomings in safety supervision and gas-testing coverage around ballast-tank work, including hydrogen sulphide risk, and recommended action under existing rules together with tighter recycling certification expectations for vessels flying non-HKC flags. The legal process now follows. For the wider industry, the important consequence is procedural: a formal lesson is becoming a new checklist.
September therefore opens with Pakistan still leading but no longer paying August urgency, Bangladesh lower as first-tier demand is covered, and India moving in the opposite direction with firmer fundamentals and better appetite. Freight is keeping potential candidates trading, the Gulf remains operational but risky, and fresh supply is still the scarce commodity. The yards have been fed. The sales list has not.
Source: GMS,Inc
