Global Market Turmoil Deepens as Steel Prices and Currencies Retreat : GMS
Global ship recycling markets entered another turbulent week following the Thanksgiving holiday, with leading cash buyer GMS reporting a synchronised decline across key indicators. From falling steel plate prices to weakening currencies, and from rising freight rates to tightening supply, the sector finds itself grappling with a complex mix of pressures as 2025 nears its end. Industry stakeholders now look toward 2026 with equal parts hope and apprehension.
According to GMS, steel plate prices—considered a critical market barometer—fell across all major sub-continent destinations, including India, Bangladesh and Pakistan. Even China, which had shown relative stability in recent months, recorded declines. The uniform retreat of plate prices has raised concerns over the short-term financial viability of recycling yards that already operate on thin margins.
Adding to the strain is the unexpected weakening of the U.S. Dollar across sub-continent markets. The only outlier was Turkey, which continues to chart its own monetary course amid persistent inflationary pressures and policy shifts. GMS noted that the simultaneous fall of steel prices and local currency values has put recyclers in a difficult position, undermining their ability to offer competitive prices for incoming tonnage.
Compounding these challenges is the sustained surge in global freight markets. The Baltic Exchange’s Dry Index climbed a remarkable 3.2 percent during the week, reaching its highest point since December 2023. What makes the trend more significant is the breadth of the rise: almost every vessel segment—from Capesize to Supramax—contributed to the upward momentum. Stronger freight rates typically discourage shipowners from selling vessels for demolition, further constricting the already limited supply of scrap tonnage.
Oil prices, meanwhile, continued their erratic downward drift. Benchmark crude closed the week at USD 59.16 per tonne, representing a 14 percent decline over the past year. GMS described oil’s performance as “idling with marginal fluctuations,” though the long-term slump reflects broader market anxieties around global consumption, energy transitions and rising inventories.
Despite these headwinds, GMS reported some pockets of activity. Both Bangladesh and India witnessed fresh arrivals and deliveries of scrap vessels, a notable development given the severe supply constraints that have dominated the sector for nearly four years. The scarcity is partly a result of the widening web of sanctions and blacklists that complicate vessel movements and ownership transfers. Tighter compliance rules have forced many shipowners to delay scrapping decisions, while others navigate lengthy clearance processes that slow down transactions.
In Bangladesh, demand remains strong, with local recyclers demonstrating renewed appetite for tonnage. Yard capacity has been steadily improving thanks to increased investment, compliance upgrades and preparations for the full implementation of the Hong Kong Convention for Safe and Environmentally Sound Recycling of Ships. As steel mills also show signs of stabilising consumption, Bangladeshi breakers have emerged as the most aggressive buyers in the sub-continent. Their comparatively higher price offerings once again positioned the country at the top of the weekly charts.
India, too, reported moderate activity. While domestic steel prices remained under pressure, Indian recyclers managed to secure a few vessels, aided by a temporarily firming rupee earlier in the week. However, industry analysts remain cautious, noting that consistent volatility in both steel and currency markets continues to hold back more ambitious buying.
Pakistan, by contrast, remained largely on the sidelines. Domestic inflation, currency swings and political uncertainties have kept the market subdued for much of the year. With limited financing and weak yard sentiment, Pakistani recyclers have struggled to match the pricing levels offered by their neighbours.
GMS highlighted that achieving USD 400 per lightweight tonne (LDT)—a benchmark for healthy market activity—remains difficult across several destinations. The combination of falling steel prices, weakening currencies and minimal vessel supply has pushed many recycling yards into survival mode. A “deadly dearth of candidates,” as GMS described it, has persisted for nearly four years, leading to intense competition among recyclers for whatever limited tonnage becomes available.
This imbalance has not only driven prices into a narrow, unpredictable band but has also led to wider concerns about operational sustainability. Some yards, particularly in Pakistan and parts of India, are operating below capacity, while others have shifted focus to maintenance and compliance upgrades in anticipation of a potential market revival.
As 2025 draws to a close, industry sentiment remains a mixture of fatigue and cautious optimism. The market’s prolonged instability has tested ship recyclers across the sub-continent, but many remain hopeful that 2026 will bring a more favourable environment. With freight markets eventually expected to cool, regulations stabilising, and steel demand likely to strengthen in key construction and infrastructure sectors, the possibility of a cyclical rebound continues to animate market discussions.
“Another four weeks and another trip around the sun means the industry continues hoping for a market resurgence in 2026. Tough year!” GMS concluded.
For now, recyclers remain watchful, navigating one of the most unpredictable market phases in recent memory, as global economic forces continue to buffet an industry already stretched thin.
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