India Leads Ship Recycling Market as Regional Competitors Struggle: STAR ASIA

India Leads Ship Recycling Market as Regional Competitors Struggle: STAR ASIA

By Mahebub Kureshi | Singapore | 22 July 2025

India’s ship recycling industry has once again demonstrated its resilience and leadership in the global market, even as neighboring countries face a mix of economic and regulatory headwinds. According to the latest weekly report from STAR ASIA, a reputed ship broker, Alang, the epicentre of India’s ship recycling industry, is attracting more end-of-life vessels than its regional counterparts.

The key differentiator for India is its increasing number of Hong Kong Convention (HKC)-compliant yards, offering shipowners a level of environmental and regulatory assurance that is becoming more valuable than mere price advantages offered elsewhere.

Alang Maintains Momentum Amid Global Caution

While international sentiment in the ship recycling sector remains cautious due to fluctuating steel prices and overall economic headwinds, Indian recyclers are quietly optimistic. The Alang yards have seen a stable flow of tonnage, reinforcing India’s role as a secure and reliable destination for ship recycling.

Nine vessels arrived at Alang between May and mid-July 2025, with a mix of LNG carriers, bulkers, tankers, and container ships. Of these, three have already been beached, with six others awaiting favourable tide and beaching slots:

One significant factor supporting Indian yards is the stability in domestic steel plate prices, which have shown surprising firmness despite the seasonal slowdown in construction due to the monsoon. While broader steel demand has eased, the core recycling segment remains well-supported, ensuring recyclers can offer reasonable prices without significant risk.

Chattogram’s Struggles: Low Demand and Few Certified Yards

In sharp contrast, Bangladesh’s Chattogram recycling market is facing one of its most difficult periods this year. A steep drop in melting steel prices, combined with weak demand in the domestic steel sector, has driven vessel pricing to its lowest point in 2025. The result? Chattogram is now finding itself unable to compete even for vessels located nearby.

Of particular concern is the lack of HKC-certified yards in the country. Only about 15 local facilities have managed to secure certification, significantly reducing the number of buyers able to handle large or environmentally sensitive tonnage.

This lack of certification is proving to be a decisive factor, especially as international shipowners increasingly prioritize compliance with global environmental standards. Consequently, several vessels that would normally be scrapped in Bangladesh are being diverted to India or even Pakistan.

Here’s a snapshot of recent vessel activity at Chattogram:

Gadani: Competitive Prices, HKC Push

Pakistan’s Gadani recycling market has been offering some of the most competitive prices in the region, thanks to a temporary regulatory window that allows non-compliant yards to receive ships while demonstrating progress toward HKC certification. This grace period has enabled recyclers to be more aggressive in their pricing strategies.

Seven yards in Gadani are reportedly on the verge of securing full HKC compliance, which will put them in a stronger position once the grace period ends. Market sentiment in Gadani remains stable, and demand continues to hold firm, though broader uncertainties in steel pricing could affect short-term momentum.

Turkey: Lull Continues Amid Holidays and Weak Mill Demand

The ship recycling industry in Aliaga, Turkey, remained in a holding pattern this week. A combination of summer holiday breaks and weak interest from domestic mills resulted in minimal market activity. Although a few vessels were reportedly offered, low demand from Turkish steelmakers means pricing remains unattractive.

Scrap and Currency Market Trends

The global ferrous scrap market was largely subdued across all regions, including India, Bangladesh, Pakistan, and Turkey. Buyers and sellers are caught in a standoff, with sellers maintaining firm offer prices while buyers push back, citing soft finished steel demand and currency pressures.

India

• Heavy melting scrap (HMS) bids capped at US$330/t CFR

• Shredded scrap offers at US$370/t CFR were largely unworkable

• Buyers are targeting US$360/t, with potential upward revision if Pakistan increases imports

Bangladesh

• US-origin HMS offers at US$360/t CFR, but buyers aiming for US$345-350/t

• Japanese H2 bulk prices slightly lower at US$336-340/t

Pakistan

• Shredded scrap from Europe quoted at US$385/t CFR, but mills largely inactive

• Soft local rebar demand and currency instability are key dampeners

Turkey

• Few deals concluded at US$347/t CFR

• Rebar sales remain weak, but scrap sellers are holding firm

Bunker Prices & Exchange Rate Trends

Fuel prices remained relatively stable across major ports:

Exchange rate fluctuations also played a minor role in shaping ship acquisition decisions:

Conclusion: India Stays the Course

With global ship recycling at a crossroads—pressured by environmental regulation, market uncertainties, and economic realignment—India has firmly positioned itself as a safe and certified option. The strategic advantage offered by its HKC-compliant yards is now outweighing price competition, making Alang the preferred destination for responsible recycling.

As the global fleet continues to age and the countdown to full HKC implementation (in June 2025) accelerates, India’s early investment in compliance and stability appears to be paying off. Meanwhile, Chattogram and Gadani must navigate both regulatory challenges and volatile steel markets if they hope to retain or grow their share.

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