Ship Recycling: Market displayed brief optimism: STAR ASIA

Ship Recycling: Market displayed brief optimism: STAR ASIA

Alang, India

The ship recycling market displayed brief optimism early in the week following the implementation of a 12% safeguard measure, though despite strong demand in India, vessel availability remains limited.

Meanwhile, PM Modi has outlined an ambitious plan to expand India’s steelmaking capacity to 500 million tons annually by 2047, positioning the country as a global steel export hub with a target of 25 million tons in exports.

Ship Recycling Market Snapshot

• All prices are USD per light displacement tonnage in the long
• The prices reported are net prices offered by the recycling
• Prices quoted are basis simple Japanese / Korean-built tonnages trading Premiums are paid on top of the above-quoted prices based on quality & quality of Spares, Non-Fe., bunkers, cargo history, and maintenance.

5-Year Ship Recycling Average Historical Prices

Ships Sold for Recycling

This steel sector expansion, coupled with infrastructure development initiatives and the growing shipbuilding industry, could suggest a potential long-term positive implication for the ship recycling market in India, especially as the country seeks to reduce import dependence and boost domestic production capabilities.

Anchorage & Beaching Position (APRIL 2025)

Chattogram, Bangladesh

There has been no significant change over the past few weeks. The industry continues to await official approval for the anticipated No Objection Certificates (NOC) that would permit the recycling of non-HKC-compliant ships.

The Bangladeshi ship recycling sector has entered a virtual standstill as no new No Objection Certificates (NOCs) have been issued for over two weeks. This has stalled ongoing negotiations and raised the risk of vessels being redirected to India or Pakistan. Authorities have begun inspections of local yards to assess progress toward the necessary infrastructure upgrades for Hong Kong Convention (HKC) Statements of Compliance (SoC), with the compliance deadline looming on June 26th.

Until significant progress is demonstrated, further NOCs are unlikely. Some yards that recently achieved SoC status have managed limited deliveries, but most vessels remain idling outside Chattogram. Encouragingly, the Director General of Shipping visited several yards over the weekend and signaled that NOCs could soon be granted to those showing sufficient upgrades.

However, wider market conditions remain difficult. Domestic steel plate prices collapsed by US$60/ton post-Eid to US$478~480/ton, and the Taka depreciated to BDT 121.99 against the U.S. dollar. The downturn in fundamentals, combined with the regulatory bottleneck, could see Bangladesh lose its top position to India in the coming weeks if conditions do not stabilise.

The sector remains on pause pending final inspection outcomes and potential limited reopening.

Anchorage & Beaching Position (APRIL 2025)

Gadani, Pakistan

The markets remain unchanged from the previous, maintaining stability with consistently firm demand and healthy buyer appetite. However, vessel availability continues to be the limiting factor, with no new tonnage entering the market to address this supply constraint. This situation closely mirrors the conditions observed in the last report.

Anchorage & Beaching Position (APRIL 2025)

Aliaga, Turkey

Turkish mills face multiple challenges, including delayed sales for the July EU quota. The market uncertainty stemming from trade tariffs and the 90-day US tariff delay did not aid in the overall situation as scrap prices fell by US$27/ton since last week.

Aliaga offers levels for bulkers and dry cargo vessels fell by another USD 20/ton this week, with prices now hovering around USD 250/MT — a stark contrast to the USD 400/MT levels seen just a few years ago.

With sub-continent markets holding steady, the widening USD 200/ton price gap makes Turkey a far less competitive option for shipowners, particularly those at publicly traded companies who must justify end-of-life asset sales. As a result, Turkish recyclers risk being further sidelined.

Sub-Continent and Turkey ferrous scrap markets insights

Ferrous scrap prices remained under pressure this week, with key markets including Turkey, India, Pakistan, and Bangladesh facing tepid buying interest amid challenging market conditions.

India

India’s imported scrap market remained subdued, with average prices slipping 2% w-o- w to US$371/ton CFR. Weak global sentiment, falling domestic steel prices, and concerns over a potential 12% safeguard duty added to buyer caution. Shredded scrap offers from the UK/Europe hovered at US$370-375/ton CFR Nhava Sheva, but bids lagged at US$365- 370/ton. High port inventories, coupled with soft Turkish scrap values and rising freight costs, limited fresh bookings.

Pakistan

Pakistan’s imported scrap market continued to face downward pressure amid sluggish rebar and billet sales, low mill utilisation (30–40% capacity), and broader global corrections. Shredded scrap prices fell 3% w-o-w to US$370/ton. A few small-lot container deals occurred early in the week at US$368-371/ton, but activity dwindled quickly. Domestic scrap prices remained steady between PKR 135,000–140,000/ton (US$483–501/ton), with billet and rebar prices hovering around PKR 712–855/ton.

Bangladesh

Bangladesh’s imported scrap market stayed quiet as mills focused on utilizing existing inventories amid weak steel demand, rising production costs, and ongoing LC challenges. Shredded prices dipped 1% w-o-w to US$381/ton, while HMS 80:20 offers were heard between US$365-370/ton. Limited buying interest persisted, with mills delaying bulk and container bookings and targeting July shipment arrivals.

Turkey

Turkey’s imported scrap market saw prices tumble to a three-year low, weighed down by weak rebar demand and elevated finished steel inventories. US-origin HMS 80:20 offers dropped 3% w-o-w to around US$325/ton CFR, compared to US$335/ton last week.

Sellers, contending with oversupply and thin margins, were forced to accept lower bids, while buyers remained cautious amid falling scrap values and sluggish rebar sales.

Market sentiment across all major South Asian destinations remains bearish heading into next week, with players cautious of further price corrections, freight rate increases, and continued liquidity challenges.

Author: shipping inbox