Ship Recycling Markets Turn Cautious as Geopolitical and Commodity Pressures Weigh on Sentiment: Best Oasis
Best Oasis in their weekly ship recycling market report opined that ship recycling markets across the Indian subcontinent ended the week on a markedly softer note, with India witnessing a sharp deterioration in sentiment amid renewed geopolitical concerns and broader weakness across the commodity complex. While activity remained thin across key destinations, the outlook turned increasingly cautious as buyers recalibrated expectations in response to policy uncertainty, volatile steel prices and limited availability of tonnage.
In India, the market softened drastically toward the end of the week after fresh concerns emerged around a potential 500% tariff threat by the United States, linked to a proposed sanctions bill targeting buyers of Russian oil. The prospect of such an aggressive tariff regime rattled confidence across several sectors, spilling over into the recycling market and prompting buyers to adopt a more defensive stance.
The negative sentiment was compounded by weakness in the broader commodity complex. Several commodities recorded sharp day-on-day declines during the week, adding further pressure on steel prices and dampening near-term optimism among recyclers. As a result, Indian buyers are now focused strictly on acquiring tonnage at prevailing market levels, with little appetite to chase prices amid heightened uncertainty.
Despite the subdued mood, actual activity remained limited due to a lack of available vessels. Market participants noted that very little fresh tonnage is entering the market, which has kept overall volumes thin and prevented a steeper correction in prices. Moreover, international scrap prices have remained relatively firm, supported by steady demand from Türkiye, which continues to underpin import levels and provide some stability to global scrap benchmarks.
Bangladesh: Activity Thins Further
In Bangladesh, the market remained largely subdued throughout the week, with minimal movement reported. Buyer participation has become extremely thin, and only a handful of recyclers are currently in a position to purchase larger tonnages. These few active buyers are expected to capitalize on the weaker market sentiment, ensuring that negotiations remain heavily skewed in their favour.
While local prices in Bangladesh have shown some marginal momentum, the gains have not been significant enough to alter the overall tone of the market. Pricing remains range-bound, and most participants are adopting a wait-and-watch approach amid lingering concerns over financing, letters of credit and downstream steel demand. With limited competition among buyers, sellers are finding it difficult to push through higher levels.
Pakistan: Cautious Optimism Emerges
Pakistan presented a slightly more positive picture compared to last week, with recyclers showing increased willingness to engage. Market sentiment has improved modestly, supported by an uptick in international prices for re-rollable and shredded steel. This has given local recyclers some optimism, helping to stabilize expectations.
However, buying interest remains disciplined. Recyclers are primarily targeting bulker tonnage below the $400 per light displacement ton (LDT) mark, indicating that while confidence has improved, buyers remain cautious and price-sensitive. Any significant rise in bids is likely to depend on sustained strength in steel prices and a clearer outlook on currency stability.
Türkiye: Quiet Holiday Week
Türkiye remained largely quiet during the week as markets moved through the New Year holiday period. Limited reportable activity was recorded, with both price levels and sentiment remaining unchanged from the previous week. Despite the lack of fresh deals, Türkiye continues to play a crucial role in supporting international scrap prices, particularly for shredded and re-rollable steel, which in turn influences sentiment across recycling destinations in South Asia.
Currency and Commodity Snapshot
On the macro front, currency movements were mixed. The Indian rupee showed marginal strength, with the USD/INR rate improving to 90.09 from 90.18 the previous week. The Bangladeshi taka also posted a slight gain, while the Pakistani rupee weakened, reflecting ongoing economic pressures. The Turkish lira saw a marginal depreciation as well.
International scrap prices remained largely stable week-on-week. Prices for HMS 1&2 (80:20) in India and Bangladesh held steady at around $358 per tonne, while Pakistan stood slightly higher at $360. Türkiye recorded a modest increase in shredded scrap prices, reinforcing its role as a price anchor for the global market.
Ship Recycling Prices and Sales
In the ship recycling segment, India’s market was described as firm overall, despite a marginal week-on-week decline of around 1.25% in bulker prices. Indicative levels in India stood at approximately $410/LDT for containers, $395/LDT for tankers, and $380/LDT for bulkers.
Bangladesh and Pakistan both maintained soft market conditions, with pricing largely unchanged on the week. Türkiye remained the lowest-priced destination, reflecting structural differences in costs and regulatory frameworks.
Only a limited number of vessel sales were reported during the week. Two RoPax vessels, GNV Antares (built 1987) and Lexa (built 1975), were delivered to Aliaga, Türkiye, with sale prices remaining undisclosed—further highlighting the lack of transparency and activity during the holiday-affected period.
Outlook
Looking ahead, market participants expect sentiment to remain cautious in the near term, particularly in India, where geopolitical developments and policy risks continue to dominate discussions. While firm international scrap prices and limited vessel availability may prevent a sharp downturn, any meaningful recovery in activity will likely depend on greater clarity around sanctions, stabilization in commodity markets, and improved confidence among end-users. For now, the ship recycling market appears set to navigate a period of consolidation, with buyers firmly in control of negotiations.
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