Global Ship Recycling Markets Continue to Struggle as Prices Decline and Uncertainty Lingers: BEST OASIS
In its latest weekly report, the world’s leading cash buyer of ships for recycling, Best Oasis, painted a subdued picture of the global ship recycling market, with most major destinations reporting weak or stagnant conditions. The report highlighted how declining steel demand, currency fluctuations, and policy uncertainties continue to weigh down recyclers in India, Bangladesh, Pakistan, and Türkiye.
India: Persistent Weakness Amid Policy Challenges
India’s ship recycling market remains deeply troubled, with prices slipping almost daily and showing no clear signs of recovery. Local demand has weakened considerably, reflecting the combined effects of slower construction activity and the government’s continued restriction on reusing ship-recycled scrap for cold rolling applications. This rule, aimed at ensuring quality control in downstream industries, has inadvertently hurt recyclers by limiting end-use flexibility for processed metal.
Despite the seasonal onset of winter — usually a period that brings steadier demand — Indian recyclers see no relief in sight. Yards in Alang and other coastal hubs report idle cranes and slower torch-cutting activity, underscoring the lack of viable tonnage and weak plate demand in local steel markets.
However, amid the gloom, there was one silver lining this week. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) delivered a crucial ruling classifying used lead-acid batteries from ship recycling as goods rather than waste or scrap. This classification exempts these batteries from excise duty, offering much-needed cost efficiency and regulatory clarity. The decision is being welcomed as a progressive step that could enhance sustainability and financial predictability for ship recyclers handling complex components.
Industry voices suggest that this decision, while narrow in scope, could mark a turning point in the government’s engagement with the sector. By clarifying regulatory ambiguities around recycled ship components, it could lay the groundwork for broader reforms in waste classification and reuse norms — something recyclers have long been advocating for.
Bangladesh: Active Buyers Amid Supply Constraints
In contrast to India’s stagnation, Bangladesh’s ship recycling market remains relatively active, with buyers still keen to secure tonnage — particularly tankers and bulkers in the 7,000–10,000 light displacement ton (LDT) range. Yet, the overall sentiment is softening, as limited vessel availability has curtailed operations at several yards in Chattogram.
Prices in Bangladesh remain comparatively firm against those in India and Pakistan, though analysts note that this relative advantage may narrow in the coming weeks. The expectation is that once local yards secure adequate tonnage, prices will stabilize and align more closely with the broader South Asian trend.
For now, Bangladeshi recyclers are managing to stay competitive by leveraging efficient yard operations and faster delivery processes. The country continues to hold a lead in handling large ocean-going vessels, but weaker global freight markets have meant fewer scrapping candidates entering the pipeline.
Pakistan: Waiting for IMF Clarity
Across the border, Pakistan’s ship recycling market is performing marginally better than India’s but remains under a shadow of uncertainty. The lingering question of the International Monetary Fund (IMF) tranche release has created significant unease among traders and recyclers alike. As government meetings with the IMF continue, sellers are reportedly adopting a wait-and-see strategy, reluctant to finalize deals until financial stability improves.
The lack of clarity on foreign currency availability has been a key constraint. Since the IMF discussions intensified, no new vessel deliveries have been recorded in Gadani, reflecting both the cautious sentiment of sellers and the challenges in securing U.S. dollars for payments.
Market participants say that if the IMF negotiations conclude positively, Pakistan could quickly regain traction, benefiting from relatively better prices and operational efficiency. However, prolonged uncertainty could push vessel owners to divert tonnage toward Bangladesh or India, where the transactional environment, despite challenges, remains comparatively more stable.
Türkiye: Stability Amid Routine Activity
The ship recycling market in Türkiye has shown a rare degree of steadiness. Import prices rose modestly by around USD 5 per light displacement ton (LDT) during the week, though local steel prices remained unchanged. Overall activity in Aliaga continues to follow its usual pattern, with recyclers showing no significant deviation in sentiment or pace.
The Turkish market’s steadiness contrasts sharply with the volatility seen in South Asia. While volumes remain modest, the sector’s resilience stems from stronger integration with the European Union’s green recycling framework and access to diversified steel markets.
Interestingly, the report highlighted a key global development that could influence future recycling activity: around 30 percent of the global container fleet — by capacity — is currently on order and scheduled for delivery within the next few years. This influx of new tonnage is expected to accelerate the replacement of older vessels, offering potential relief for recyclers as obsolete ships begin to flow into yards by the late 2020s.
Market Indicators and Exchange Rates
Global commodity and currency movements added another layer of complexity to the week’s trading environment. The USD/INR rate strengthened slightly, moving from 88.78 to 88.71, while the Bangladeshi Taka weakened marginally from 121.70 to 122.03 per U.S. dollar. The Pakistani Rupee slipped from 282.53 to 283.45, and the Turkish Lira also weakened slightly from 41.68 to 41.81.
Crude oil benchmarks remained relatively steady, with Brent and WTI crude showing mild fluctuations, suggesting stable input costs for steelmakers and recyclers.
Steel and Scrap Prices
Prices for HMS 1&2 (80:20) and shredded scrap reflected the overall softness in steel markets. In India, HMS averaged USD 355 per ton, while shredded scrap stood at USD 365, marking a 1.41 percent week-on-week decline. Similar patterns were observed in Bangladesh, Pakistan, and Türkiye, with minor dips across the board.
The parity in scrap pricing across these regions underlines how closely tied global recycling markets have become, with local conditions increasingly shaped by broader economic and industrial trends.
Ship Recycling Prices and Activity
The week’s indicative prices for ship recycling revealed a mixed performance. In India, the market remained soft, with container ships fetching around USD 412/LDT, tankers USD 398/LDT, and bulkers USD 383/LDT, showing a week-on-week fall of about 1.24 percent.
Bangladesh also softened, with containers at USD 441/LDT, tankers at USD 431/LDT, and bulkers at USD 395/LDT, reflecting a sharper 3.9 percent decline. Pakistan’s market was firmer, with containers trading near USD 415/LDT and tankers at USD 400/LDT, while Türkiye remained stable, maintaining container prices at USD 270/LDT.
Among the week’s reported deals, several notable vessels changed hands. The FPSO Northern Endeavor was delivered in Denmark with undisclosed pricing, while the Bow Cedar, a tanker of 11,043 LDT, was sold to Alang, India, reportedly at USD 937 per LDT — one of the higher-value transactions. The TG Arktika, a bulker of 8,110 LDT, was delivered to Aliaga, Türkiye, while Eena Tween reached Gadani, Pakistan.
Outlook: Waiting for Winds to Shift
As the global ship recycling industry edges toward the final quarter of the year, uncertainty continues to define the landscape. Weak steel demand, limited vessel supply, and macroeconomic pressures have converged to dampen optimism across key markets.
Yet, there are reasons for cautious hope. The expected delivery of a new wave of container vessels could soon create opportunities for recyclers, while regulatory progress in India hints at a slow but meaningful shift toward clearer, greener, and more cost-efficient operations.
For now, the sparks at the yards may be fewer, but the resilience of recyclers across Alang, Chattogram, Gadani, and Aliaga suggests that even in difficult times, the world’s end-of-life ships continue to find a purpose — melted, remade, and ready for new beginnings.
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