he global ship recycling market softened during the past week as currency pressures, weaker local steel prices and cautious buying sentiment weighed on major recycling destinations, according to the latest weekly assessment by cash buyer Best Oasis. However, limited availability of end-of-life vessels continued to support demand and prevent a sharper decline in market activity.
Industry participants said the Indian market remained under pressure as the U.S. dollar strengthened against the rupee, reducing the purchasing power of local recyclers and forcing price corrections. Despite softer pricing, demand for suitable recycling candidates remained relatively healthy because of a shortage of available vessels entering the demolition market.
According to Best Oasis, Indian buyers continue to show interest in acquiring non-sanctioned vessels, particularly ships that are not linked to the so-called “dark fleet.” Market observers noted that while buyers are becoming increasingly selective, quality tonnage with clear compliance records is still attracting firm interest from recycling yards.
One of the most significant developments highlighted in the report was the growing focus on regulatory compliance. The European Union’s Environmental Crime Directive, which formally classifies unlawful ship recycling as a criminal offence, is drawing heightened attention across the industry. The directive is expected to increase scrutiny of recycling destinations and strengthen demand for environmentally compliant recycling practices worldwide.
The regulatory spotlight comes as the global ship recycling industry adapts to stricter environmental and safety standards following the entry into force of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships in June 2025. The convention requires ship recycling facilities to meet international standards relating to worker safety, hazardous waste management and environmental protection.
In India, another noteworthy development involves growing interest in recycling vessels that have previously faced sanctions-related restrictions. According to the report, at least one recycling yard has reportedly secured U.S. approval to recycle sanctioned vessels, while additional applications are currently under review. The development could potentially open new opportunities for compliant recyclers if approvals continue to expand.
The report also pointed to the emergence of new recycling capacity in the Gulf region. The recently established joint venture between Bahrain-based Arab Shipbuilding and Repair Yard (ASRY) and India’s Priya Blue Industries has already received its first vessel, a barge, for recycling. Industry observers view the project as a sign of growing regional interest in environmentally compliant ship recycling facilities outside traditional South Asian hubs.
Meanwhile, discussions within the market suggest that Indian authorities may consider requiring vessels to be registered under the Indian flag before being delivered for recycling. Although no formal policy has been announced, the possibility is being closely monitored by shipowners, cash buyers and recyclers because of its potential implications for future transactions.
Recent weeks have shown a gradual shift in market sentiment. Earlier in May, Bangladesh had emerged as the most competitive recycling destination, while Indian recyclers struggled to match higher offers because of currency fluctuations and weaker domestic steel demand. Since then, market conditions have remained subdued, with buyers across South Asia adopting a more cautious approach amid economic uncertainty.
Despite the current softness, industry participants remain cautiously optimistic. The continuing shortage of recycling candidates, combined with tightening environmental regulations and the growing emphasis on compliant recycling facilities, is expected to support long-term demand. Market analysts believe that while short-term pricing may remain volatile, the sector’s gradual transition toward higher environmental and operational standards could strengthen the industry’s foundations in the years ahead.
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