Insights Alang: Currency Weakness- Trade Shocks- and Shifting Sentiments in South Asian Ship Recycling
The ship recycling industry, already accustomed to volatility, is now navigating through some of the most turbulent waters in recent years. Alang, the world’s largest shipbreaking hub located on India’s western coast, finds itself at the center of economic headwinds triggered by newly imposed U.S. tariffs and sanctions. These developments have shaken global trade dynamics, sent ripples through South Asian recycling markets, and exerted immense pressure on local economies.
In Alang, the external pressure has translated into a historic depreciation of the national currency, with the Indian Rupee breaching the 88 mark against the U.S. dollar for the first time. For recyclers who deal almost entirely in dollar-denominated vessels, the impact has been immediate and painful. Costs have surged, buyers are revising their price expectations downward, and new commitments have stalled. Yet, despite these challenges, Alang has maintained a degree of stability compared with its regional rivals, offering owners a viable outlet at a time when options are limited.
Alang: Buyers Turn Cautious Amid Rupee Weakness
The depreciation of the Indian Rupee has raised the effective cost of acquiring tonnage, as payments must be made in dollars. For recyclers, who must already factor in domestic steel demand, labor costs, and compliance with safety and environmental standards, this additional burden has forced a more cautious approach.
Market participants report that buyers in Alang have adopted defensive pricing strategies, lowering their indications to compensate for the currency hit. Negotiations have slowed, with few fresh deals finalized in recent weeks. Owners, however, continue to favor Alang as the most reliable destination when compared with Chattogram and Gadani, where political, logistical, and environmental challenges remain significant obstacles.
Despite the financial strain, routine buying continues at Alang, with several vessels awaiting or completing the beaching process in September.
Anchorage & Beaching Position (September 2025 – Alang)
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CONICO ATLAS – Tanker, 20,001 LDT, arrested since June.
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NIRVANA – Tanker, 9,623 LDT, arrested since May.
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COAL II – Tanker, 14,840 LDT, arrived September 13, awaiting beaching.
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RISING FALCON – Bulker, 5,964 LDT, arrived June 12, awaiting beaching.
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PHONE – Tanker, 10,129 LDT, arrived September 12, awaiting beaching.
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FP FUTURE – Woodchip carrier, 9,799 LDT, beached on September 11.
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SHAAN – LNG, 33,406 LDT, beached September 10.
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KHAZA – LNG, 33,456 LDT, beached September 9.
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MAHAR – Tanker, 18,264 LDT, beached September 6.
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ABDULLAH F – General cargo, 2,766 LDT, beached September 2.
The steady flow of vessels underscores Alang’s resilience, even as margins narrow.
Chattogram: Political Uncertainty Deepens Market Collapse
Bangladesh’s ship recycling hub in Chattogram has faced an even tougher week. The combination of weak domestic steel demand and falling plate and scrap prices has paralyzed market activity. Steel sellers are competing aggressively, often undercutting each other, which has eroded recycler confidence.
Adding to the woes is political uncertainty ahead of national elections. The fragile economic climate has deterred buyers, many of whom have withdrawn from negotiations altogether. The weakening of the Bangladeshi Taka against the dollar has further complicated matters, mirroring the struggles seen in India.
At Chattogram’s anchorage, activity is subdued.
Anchorage & Beaching Position (September 2025 – Chattogram)
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DK 03 – Bulker, 7,809 LDT, awaiting beaching since early August.
With only one vessel in queue, the waterfront presents a picture of inactivity.
Gadani: Flooding Damps Sentiment but Prices Hold Firm
In Pakistan, the Gadani shipbreaking market has been grappling with its own domestic challenges. Severe flooding has disrupted the local steel supply chain, suppressing demand and creating uncertainty. Yet, in contrast to Bangladesh, recyclers in Gadani have opted to hold their ground, keeping price indications stable at last week’s levels despite muted activity.
No fresh tonnage has arrived at the Gadani waterfront this week, leaving buyers with little to act on. Still, the relative stability in pricing has provided some assurance to market participants.
Anchorage & Beaching Position (September 2025 – Gadani)
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FORTUNE OCEAN – General cargo, 2,261 LDT, awaiting since mid-August.
Aliaga: Turkish Market Quiet as Lira Weakens
Turkey’s Aliaga recycling market also reported muted activity. The Turkish Lira slipped further to 41.37 against the dollar, a 0.3% weekly decline. While not yet alarming for importers, the depreciation is being closely monitored. For now, the Turkish market remains quiet, with little movement in tonnage or prices.
Scrap Market Insights: Sub-Continent and Turkey
The weakness in recycling activity mirrors a subdued scrap market across South Asia and Turkey. Seasonal factors, sluggish steel mill purchasing, and persistent bid-offer mismatches have prevented meaningful trade.
India
Imported scrap offers have emerged, but actual business remains limited. At Nhava Sheva, shredded scrap was offered in the range of US$363–365 per ton CFR, while busheling was priced at US$372–375. Buyers, however, trailed offers by US$6–10, leaving most deals stranded. A seasonal slowdown in construction and infrastructure projects has compounded the cautious sentiment.
Pakistan
Logistical challenges due to heavy rains have crippled trading momentum. At Port Qasim, shredded scrap offers of US$372–374 per ton CFR failed to attract interest, as bids hovered at US$366–368. With market sentiment dampened, buyers remain hesitant.
Bangladesh
The Bangladeshi scrap market has shown faint signs of life, though overall trade is slow. Offers for shredded scrap at US$375–378 per ton CFR Chattogram were met with bids around US$370–372. Finished steel prices provided some stability, with billet prices edging higher and rebar remaining steady in Dhaka and Chattogram.
Turkey
European scrap oversupply has weighed on Turkish deepsea scrap prices. EU-origin HMS 80:20 was tradable at US$328–333 per ton CFR, while U.S. sellers attempted to maintain firmer levels. However, muted buying from Turkish mills kept downward pressure on the market.
Bunker Prices and Exchange Rates
Bunker fuel costs, a key indicator of shipping economics, remained mixed. In Singapore, very low sulfur fuel oil (VLSFO 0.5%) was priced at US$499 per ton, while marine gas oil (MGO 0.1%) commanded a steep US$645. Rotterdam and Houston posted competitive levels, with MGO priced at US$627 and US$659 respectively.
On the currency front, volatility persisted. The Indian Rupee fell marginally from 88.20 to 88.27 per U.S. dollar, while Bangladesh’s Taka and Pakistan’s Rupee hovered near record lows. The Turkish Lira’s slide to 41.37 underscored the fragility of emerging market currencies in the face of global trade shocks.
Outlook: Stability in Uncertainty
The ship recycling industry finds itself once again at the mercy of macroeconomic forces beyond its control. For Alang, the rupee’s depreciation has reshaped pricing dynamics, but the yard remains an active and relatively stable player compared with its regional peers. Chattogram, by contrast, is suffering from a collapse in confidence, while Gadani’s resilience is being tested by environmental disasters. Aliaga, for now, is in watch-and-wait mode.
In the weeks ahead, much will depend on currency stability, domestic steel demand, and whether buyers regain the confidence to engage in fresh negotiations. For now, the global outlook remains cautious, with recyclers across South Asia bracing for continued turbulence.
Author: shipping inbox
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