Ship Recycling: Market remaining flat: STAR ASIA

Ship Recycling: Market remaining flat: STAR ASIA

The Hong Kong Convention for ship recycling officially begins enforcement on June 26, 2025, across all three major recycling destinations. This represents a pivotal moment for the global shipping industry as new mandatory requirements take effect, with all ship recycling operations having to take place exclusively at facilities holding a valid Document of Authorisation to conduct Ship Recycling certification.

The implementation represents the most significant regulatory transformation in ship recycling practices in recent years. At the same time, the five-year implementation window provides adequate adaptation time, early compliance positions operators advantageously in an increasingly regulated maritime environment.

New ships must also comply immediately with IHM Part I requirements upon the Convention’s entry into force. Existing vessels have a five-year compliance window, which extends until June 26, 2030. However, they must comply before proceeding to recycling if that occurs earlier.

Alang

Ahead of the HKC enforcement, India has now issued a circular that vessels arriving for recycling after June 26 must carry valid IHM Part I certificates onboard, while those arriving on or before June 25 can still operate under the existing Alang system protocols

In India, however, ships currently holding valid Statements of Compliance can now convert to the required International Certificate on IHM through a streamlined administrative process that eliminates the need for additional inspections.

Recycling activity this week is at a minimum, with the overall outlook remaining flat.

Anchorage & Beaching Position (MAY 2025)

Chattogram

Another quiet week in the Bangladesh sector with no visible light at the end of the tunnel.

With the upcoming Eid Adha holidays next week, markets are expected to remain like last. Currently, only HKC yards are getting approval for NOCs but even so buying activity remains soft.

Anchorage & Beaching Position (May 2025)

Gadani, Pakistan

Pakistan saw another quiet week especially with Eid Adha celebrations next week.

Like both Bangladesh and India, Pakistan has also issued a circular to complete IHM 1,2,3 before the beaching of the vessels ahead of the 26th of June HKC enforcement. Current market conditions are also subdued with political uncertainty weighing on the overall outlook.

Anchorage & Beaching Position (MAY 2025)

Aliaga, Turkey

Turkey’s ship recycling market experienced another quiet week with no new activity reported, reflecting ongoing subdued conditions despite modest improvements in the broader Turkish economy.

Following April’s economic slump, Turkey’s economic confidence index recovered slightly in May, rising m-o-m to 96.7, while the construction confidence index rebounded 3.9 points to 88.4 after declining since February.

Sub-Continent and Turkey ferrous scrap markets insights

INDIA

Imported scrap market remained under pressure this week as sluggish steel demand, compressed margins, and mills’ growing preference for sponge iron and pellets continued to weigh on trading activity. Mills demonstrated pronounced caution, favouring short-transit cargoes amid mounting monsoon uncertainties that typically disrupt logistics and construction activity. Shredded scrap offers from UK and European origins held steady around US$370-375 per ton CFR, though buyer bids remained consistently lower at US$360-365 per ton, while HMS 80:20 material was offered at US$345-350 per ton CFR with bids near US$340-345 per ton.

BANGLADESH

Bangladesh’s imported scrap market faced mounting pressure as mills maintained cautious positions amid an Eid-related slowdown, ongoing letter of credit difficulties, and escalating freight costs that further complicated procurement decisions. Australian HMS 80:20 was offered at US$355-360 per ton CFR Chattogram, with HMS 1 commanding US$365-367 per ton CFR, shredded scrap at US$375-380 per ton CFR, and busheling reaching US$385-390 per ton CFR. Domestic scrap prices ranged between BDT 53,000- 55,000 per ton, while finished rebar prices declined to BDT 82,000-83,000 per ton in Dhaka and BDT 84,000-86,000 per ton in Chattogram, reflecting subdued construction activity and weakening demand fundamentals that are expected to persist through mid-June.

PAKISTAN

The scrap market exhibited similar weakness as high freight costs, tepid steel demand, and the approaching Eid holidays combined to suppress trading activity significantly. Mills showed pronounced hesitation in booking cargoes, resulting in minimal buying interest across all material grades and origins. UK and EU-origin shredded scrap offers ranged between US$380-385 per ton CFR Port Qasim, while bids remained slightly lower around US$380-382 per ton, contributing to exceptionally thin trade volumes. Shipping surcharges prompted some cargoes to divert toward India, though persistently low Indian prices suggested these shipments might eventually return to Pakistani ports as sellers sought better pricing opportunities.

TURKEY

Turkey’s imported scrap market softened moderately as ample supply conditions overwhelmed persistently weak demand, leading to reduced buying interest and lower bid levels across major material categories. Indicative values remained at or below US$347 per ton CFR, with bids heard at US$340 per ton CFR for US-origin material and declining to US$335 per ton CFR for EU-origin scrap. Despite downward pricing pressure, sellers maintained relatively firm positions, particularly for EU-origin material around US$342 per ton CFR, though buyers remained largely inactive, citing oversupply conditions and current price levels as commercially unworkable. Market sentiment turned increasingly cautious with bearish undertones strengthening as participants anticipated further weakness ahead.

Author: shipping inbox