India’s Ship-Breaking Industry Leads in January 2025 with a 110% Surge
February 2025 – India’s ship-breaking industry kicked off 2025 on a strong note, recording an impressive 120,779 Light Displacement Tonnage (LDT) in January. This represents a staggering increase of over 110% from December 2024’s 56,491 LDT and a more than 50% rise from January 2024’s 79,341 LDT. The sector’s robust performance, despite market headwinds, underscores its resilience and strategic importance in the global ship recycling landscape.
Alang’s Steady Ship Arrivals Amidst Market Challenges
The Alang ship-breaking yard, India’s premier hub for ship recycling, maintained a steady inflow of vessels for dismantling. January saw the arrival of 10 ships for recycling, mirroring December 2024’s tally. However, while the number of arrivals remained stable, market conditions presented significant challenges.
Prices in Alang held firm at approximately INR 500 per LDT, yet the industry grappled with multiple adversities. A weakening rupee, falling steel prices, and reduced demand left recycling yards operating below full capacity. Furthermore, limited vessel arrivals compared to Bangladesh’s Chattogram ship-breaking sector hindered Alang’s operational efficiency.
Adding to the woes, regulatory restrictions on non-green yards and the emerging competition from Pakistan’s upcoming Hong Kong Convention (HKC)-compliant ship-breaking facilities further stifled purchasing activity. Many buyers exercised caution, reluctant to invest amid market uncertainties.
Despite these challenges, optimism remained prevalent. Industry stakeholders looked forward to potential government interventions in the upcoming budget, including fiscal incentives and protectionist measures such as tariffs on cheap steel imports. These anticipated initiatives could provide much-needed momentum to the sector in the coming months.
Pakistan’s Ship Recycling Sector Remains Stagnant
Unlike India, Pakistan’s ship-breaking sector recorded no activity in January 2025. The total tonnage processed stood at zero, continuing the trend from December 2024. This inactivity represented a sharp year-on-year decline from the 31,976 LDT recorded in January 2024, reflecting a prolonged downturn in Pakistan’s ship recycling market.
The Gadani ship-breaking yard, once a competitive player in South Asia, continued to struggle. No new arrivals and unsold tonnage indicated that the slowdown had deepened. With unchanged rates and declining demand shrinking profit margins, the Cold Rolled Coil (CRC) and Hot Rolled Coil (HRC) markets faced financial pressure. Many rerolling mills ceased operations due to adverse economic conditions, compounding industry-wide struggles.
Economic instability, stringent regulatory requirements for HKC compliance, and ongoing Letter of Credit (LC) shortages significantly hindered Pakistan’s ship-breaking sector. While slight improvements in steel prices and the Pakistani rupee’s stabilization provided minor relief, they were insufficient to spark a revival.
The outlook for the market remains bleak through the first quarter of 2025, with a potential recovery projected post-Ramadan. Industry insiders anticipate that financial aid programs and infrastructure upgrades could offer a much-needed boost later in the year, but until then, the sector is expected to remain subdued.
Bangladesh’s Ship Recycling Sector Sees Significant Growth
In contrast to Pakistan’s dormancy, Bangladesh’s ship recycling sector exhibited strong growth in January 2025. Recyclers processed approximately 96,399 LDT, reflecting a remarkable 120% increase from December 2024’s 43,935 LDT. Year-on-year, the country’s ship-breaking tonnage surged by nearly 75% compared to the 55,078 LDT recorded in January 2024.
Bangladesh dismantled nine ships in January, a considerable rise from the four vessels recycled in December. This uptick signaled a short-term improvement in the market’s performance.
However, despite the increase in ship arrivals, the overall sentiment in the Bangladesh ship recycling market remained cautious. Economic instability, a depreciating Taka, and stagnant steel prices continued to impact business. Additionally, recent regulatory changes mandating environmental compliance further slowed vessel procurement. Many ship recyclers found themselves unable to secure No Objection Certificates (NOCs) due to non-compliance, restricting business opportunities.
Industry players also faced inflationary pressures, higher Value-Added Tax (VAT) rates, and the growing need to meet HKC compliance standards. These factors collectively led to fewer competitive offers for vessel purchases. While some high-profile sales took place, many high-priced, unsold vessels lingered in the market, reflecting limited cash buyer activity.
Looking ahead, Bangladesh’s ship-breaking industry is expected to maintain a cautious approach. Market recovery is projected in the second half of 2025, contingent on economic stabilizers and improved regulatory clarity.
Future Outlook: Navigating Market Uncertainties
The South Asian ship-breaking industry is navigating a complex and evolving landscape in early 2025. While India and Bangladesh have shown resilience and growth, Pakistan’s market remains stagnant, plagued by economic and regulatory challenges.
India’s ship recycling industry, bolstered by strong performance in January, remains optimistic about potential government support in the forthcoming budget. Tariffs on low-cost steel imports and other protective measures could provide the necessary impetus to sustain growth.
Bangladesh’s market, despite its recent surge, must address regulatory bottlenecks and economic instability to maintain momentum. Meanwhile, Pakistan’s industry faces an uphill battle, with recovery expected only in the latter half of the year.
As global shipping trends continue to evolve and environmental compliance becomes increasingly critical, the ship-breaking sectors in India, Bangladesh, and Pakistan must adapt. Investments in sustainable practices, infrastructure development, and policy support will be key drivers in shaping the future of South Asia’s ship recycling industry.
