India’s Ship Recycling Industry remains Slow: STAR ASIA

India’s Ship Recycling Industry remains Slow: STAR ASIA

The recycling industry is preparing for significant changes as June 26 approaches, bringing mandatory requirements for IHM 1, 2, and 3 that will create considerable market dynamics. Another key component of these changes involves the introduction of the International Ready for Recycling Certificate (IRRC), issued by flag states, which represents a fundamental shift in how vessels approaching their end-of-life are processed.

The IRRC requirement forms part of the broader HKC regulation framework, serving as a formal document that verifies vessels have been properly prepared for recycling by international safety and environmental standards.

Overall, the market will need to adapt and recalibrate to accommodate these new regulations, much like the industry adjusted when gas-free certificates were first introduced, with market participants now positioning themselves to meet these evolving regulatory demands while managing the associated costs and operational adjustments that will inevitably follow.

Alang, India

India’s ship recycling market remains slow with reduced interest and limited movement across the board, as the local market continues to decline with no visible signs of recovery or fresh activity, though the sector finds some support from rising steel plate prices and HKC compliance requirements.

The country’s rebar market has also remained subdued this week, with inquiry levels unchanged from the previous week, pointing to persistently weak demand that has prompted another round of price reductions across both primary and secondary markets, with producers cutting prices more aggressively than in early May.

Anchorage & Beaching Position (MAY 2025)

Chattogram

The Bangladesh ship recycling market continues to remain muted as the Hong Kong Convention implementation approaches.

The situation is further complicated by the current regulatory environment, where no No Objection Certificates (NOCs), are being issued to non-green, non-HKC-compliant yards, resulting in approximately five vessels waiting in the pipeline with uncertain prospects.

Buyers are showing limited interest at present, particularly with fewer yards expected to remain active come 26th June.

Uncertainty continues to surround the issuance of NOCs, leaving cash buyers and shipowners in limbo. Several vessels have arrived and remain anchored offshore, with their fate still to be determined. The prolonged delays are incurring significant holding costs and exposing owners to increased operational and financial risk.

Anchorage & Beaching Position (May 2025)

Gadani, Pakistan

Pakistan continues to face inactivity despite the emerging demand. Recyclers are becoming desperate to acquire tonnage as the yards are empty, and they require a ship to continue demonstrating recycling in accordance with HKC norms to obtain their certifications.

Recyclers are now prepared to pay slightly above their comfort zone merely to demonstrate their capabilities and secure the HKC certifications necessary for their long- term business.

So far, there have been no developments from the local authorities indicating that an extension will be granted to provide the yards with more time to obtain the HKC certifications.

Anchorage & Beaching Position (MAY 2025)

Aliaga, Turkey

The market continues to reflect last week’s inactivity. Prices remain largely unchanged, with no new sales to report this week.

Environmental concerns have escalated in Turkey’s ship recycling sector following the government’s decision to exempt 22 Aliağa-based yards from conducting Environmental Impact Assessments (EIAs). The move has triggered legal challenges from civil society groups, citing serious pollution and public health risks tied to the industry. Adding to the pressure, the upcoming enforcement of the Hong Kong International Convention (HKC) on June 26, 2025, is set to introduce stricter environmental compliance requirements.

With Turkey’s readiness for HKC implementation still unclear, uncertainty looms over its global competitiveness. The sector now faces a critical juncture shaped by regulatory scrutiny and market volatility.

Sub-Continent and Turkey ferrous scrap markets insights

India

India’s imported scrap market remained stable this week as buyers pushed back against higher offer levels, citing subdued steel demand and the ready availability of alternatives such as sponge iron. Shredded scrap offers were mostly positioned in the US$370-375 per ton CFR range, though buying interest proved softer with bids gravitating closer to US$365 per ton. Recent trading activity included the sale of 1,000 tons of Poland-origin HMS 80:20 at US$362 per ton CFR Mundra, reflecting the cautious approach buyers are taking in the current market environment.

Bangladesh

Bangladesh’s imported scrap market remained under pressure as mills held back on fresh purchases amid ongoing financial constraints and a seasonal lull. With the monsoon season and Eid holidays approaching, trade activity slowed further as many buyers focused on conserving cash and managing existing stock levels. Domestic scrap was priced between BDT 53,000-55,000 per ton, while rebar prices ranged from BDT 80,000-82,000 per ton in Dhaka and BDT 84,000-86,000 per ton in Chattogram, reflecting the challenging market conditions facing the region.

Pakistan

Pakistan’s imported scrap market remained sluggish, weighed down by consistently high freight costs and weak demand in the domestic steel sector. Suppliers from the UK and Europe offered shredded scraps at US$380-388 per ton CFR Port Qasim, but buyer interest was limited and mainly focused near the lower end of the range, resulting in scarce firm purchases and minimal trading activity. Additionally, HMS sheared scrap from the UAE was offered at US$370 per ton CFR Qasim, while HMS standard from the UAE was quoted at US$366 per ton CFR Qasim.

In a significant development, major Pakistani mills raised rebar prices by PKR 5,000 per ton effective May 23rd, citing higher raw material costs, increased container freight charges, and rupee depreciation, bringing new rebar prices to PKR 237,000-239,000 per ton.

Turkey

Turkey’s deep-sea ferrous scrap market remained steady day-over-day, with prices for US/Baltic-origin HMS 80:20 holding around US$347 per ton CFR. Both buyers and sellers demonstrated caution, resulting in muted trading activity and minimal movement in price levels.

This subdued market sentiment stems primarily from slow domestic rebar demand, which has started the week weaker than mills had anticipated, leading to a conservative purchasing approach as mills expect no immediate supply disruptions or sudden demand surges from Asia or other regions that would justify aggressive restocking.

Author: shipping inbox