Global Ship Recycling and Steel Markets Face Another Tumultuous Week: BEST OASIS
World’s leading Cash Buyer for Ships sending for recycling, BEST OASIS in their weekly ship recycling market report opined that the global ship recycling industry witnessed another week of uncertainty and sluggishness, as major South Asian markets struggled with weak demand, poor sentiment, and external challenges. From India to Bangladesh, Pakistan, and Türkiye, the tone remained largely subdued, with most players adopting a cautious approach amid falling prices and dwindling activity.
In India, the market came off drastically over the past week, reflecting heightened pressure on both demand and pricing. Steel sales remain extremely poor, with demand virtually absent in domestic markets. This has further dampened the overall mood among ship recyclers and steel mills, who now appear hesitant to make fresh commitments. Industry participants are adopting a wait-and-see approach, as uncertainty prevails in the outlook. A lack of clarity on government approvals and a sluggish flow of vessels to the yards have only compounded the situation.
Bangladesh is also experiencing a challenging phase. The market remains soft, with steel demand continuing to fall and sentiment weakening across the board. The country is facing ongoing foreign exchange shortages, which have added a layer of strain on recyclers and traders. Many local players are hesitant to commit to new purchases, fearing further currency depreciation and a lack of liquidity. Though around 17 ship recycling yards in Chittagong are now Hong Kong Convention (HKC) compliant, several others are still chasing No Objection Certificates (NOCs). However, fresh approvals from the Ministry seem unlikely at this stage, making it harder for smaller players to compete in an already fragile market.
Across the border in Pakistan, conditions are no better. The local ship recycling market continues to remain depressed, with smuggling of goods from Iran exerting heavy pressure on prices and overall sentiment. This illicit inflow of cheaper products has undercut domestic steelmakers and recyclers, making it difficult for them to maintain profitability. Buying interest in Pakistan is extremely limited, with only a handful of buyers and breakers still active in negotiations. Current offers are slipping further, with buyers now positioning closer to the USD 400 per light displacement ton (LDT) mark. The decline reflects not just weak demand but also the fragile economic backdrop, where inflation and currency volatility have forced market players to tread carefully.
In contrast, Türkiye has maintained a relatively stable footing. The Turkish recycling market recorded no significant change this week, with both prices and activity holding at the same levels. Such stability is not unusual in Türkiye, where the market often moves only when external triggers—such as changes in steel scrap imports, regional shipping flows, or global demand shifts—come into play. For now, recyclers in Aliaga remain content with existing levels, though the subdued tone of the South Asian markets has limited overall momentum.
Global commodity and currency markets have also played their part in shaping sentiment. Brent crude and WTI crude prices, along with volatile exchange rates, are influencing operational costs and shaping trade decisions across the region. Exchange rate movements have been particularly notable. The Indian Rupee slipped further against the US dollar, with the exchange rate moving from 88.10 last week to 88.71 this week, reflecting a loss of 0.61. The Bangladeshi Taka also weakened slightly, moving from 121.72 to 121.94. Pakistan’s Rupee, on the other hand, registered a marginal gain, strengthening to 282.78 from 283.12 in the previous week. Meanwhile, the Turkish Lira recorded a minor loss, sliding to 41.50 from 41.35. Such fluctuations continue to unsettle recyclers, who must constantly adjust their offers and sales strategies in line with shifting currency dynamics.
Prices of HMS 1 & 2 (80:20) and shredded scrap further highlight the fragile tone of the market. In India, Bangladesh, and Pakistan, HMS 1&2 is holding at USD 350 per ton, while shredded scrap is pegged at USD 355. Türkiye, however, remains slightly lower on HMS 1&2 at USD 335, though its shredded scrap price stands higher at USD 360. This narrow band of pricing across regions illustrates both the interconnectedness of the markets and the general lack of upward momentum.
Turning to the ship recycling sector specifically, the tone across all major markets remains either soft or stagnant. In India, prices have slipped further, with container vessels fetching around USD 427 per LDT, tankers around USD 413, and bulkers at USD 398. This marks a week-on-week fall of nearly 4 percent. Bangladesh is witnessing similar weakness, with container vessels at USD 431, tankers at USD 421, and bulkers at USD 397, reflecting a 2 percent decline. Pakistan has managed to hold firm, with container vessels at USD 425, tankers at USD 410, and bulkers at USD 405, showing no change from the previous week. Türkiye continues its steady trend, with container vessels priced at USD 270, tankers at USD 260, and bulkers at USD 250, all unchanged week-on-week.
Despite the overall gloomy sentiment, a handful of vessels changed hands this week, providing some activity in an otherwise dull market. The Kosta, a large bulker with a light displacement tonnage of 20,841, was delivered to Alang, India, though the sale price remained undisclosed. Similarly, the Ali S, another bulker of 4,869 LDT, was also delivered to Alang under undisclosed terms. Bangladesh secured deliveries of two notable vessels: the Asian Enterprise, a bulker of 9,016 LDT, sold at USD 425 per LDT, and the Niigata Trader, a container ship of 4,089.92 LDT, which fetched USD 480 per LDT, the highest disclosed price of the week. Türkiye received two vessels in Aliaga—the Mody M, a 2,303-ton bulker, and the Arel 5, a multipurpose vessel of 1,060 LDT, sold at USD 235 per LDT. Meanwhile, two vessels were sold on “as-is” terms in Indonesia: the AE Gas, an LPG carrier of 2,222.21 LDT, at USD 390 per LDT in Batam, and the Puteri Kirana, an 8,082-ton bulker in Surabaya, though the price remained undisclosed.
These vessel sales illustrate that while sentiment remains weak, there is still selective buying interest in well-positioned ships, particularly container vessels, which continue to command premium prices due to their steel composition and demand profile. However, the number of transactions remains low compared to typical seasonal averages, underscoring the cautious approach that buyers and breakers are taking.
Looking ahead, industry insiders suggest that the coming weeks will remain challenging unless there is a significant turnaround in steel demand or a shift in global shipping patterns that brings more tonnage into recycling yards. For India and Bangladesh, domestic policy clarity and currency stability will be crucial in restoring confidence. For Pakistan, controlling smuggling and addressing its broader economic fragility will be key to reviving sentiment. Türkiye may continue its steady path, though its dependence on external market triggers means that any global volatility could quickly ripple through Aliaga.
For now, the global ship recycling industry finds itself in a delicate balance—caught between weak steel demand, volatile currencies, and broader economic uncertainties. With players across South Asia tightening their positions and limiting exposure, the sector may have to endure more weeks of muted activity before a clearer direction emerges.
Author: shipping inbox
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