Freight Rate as A Determinant Factor of Ship Recycling Volume
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Keywords:
Baltic Dry Index, Causality, Ship Demolition, Dry Bulk ShippingAbstract
The ship recycling sector is important for both the maritime market and the steel market. Therefore, understanding its dynamics contributes to many sector stakeholders. In our study, we preferred Baltic Dry Index (BDI), and Recycled Bulker Tonnage (RBT) variables to examine the relationship between freight rate and recycled tonnage in the dry bulk market. Our data consists of 153 observations covering the period from the first quarter of 1985 to the first quarter of 2023. Applied Granger causality analysis showed that changes in freight affect the tonnage sent for recycling, an unexpected positive shock in freights generate a negative effect on tonnage and this effect loses its effect after three periods.
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