Market Caution Shadows South Asian Ship Recycling Hubs as Steel Weakness Persists: STAR ASIA
Leading Ship Broker STAR ASIA, in their weekly ship demolition market report, opined that the ship recycling industry, spread across Alang in India, Chattogram in Bangladesh, Gadani in Pakistan, and Aliaga in Turkey, has entered the final week of September 2025 under the shadow of uncertainty. While the market traditionally braces itself for a post-monsoon surge, this year’s performance has so far remained subdued, reflecting the intertwined struggles of the domestic steel sectors in these countries and the operational hurdles each market is facing.
Alang: Indian Market Enters a Lull
At Alang, the world’s largest ship recycling hub located along the Gujarat coast, market sentiment has shifted notably downward. The past week saw recyclers grappling with a pronounced slowdown, largely due to weak demand in India’s domestic steel market. Finished steel goods have not been moving as expected, and this has trickled down through the supply chain, weakening both plate and scrap values.
Despite these pressures, Alang’s ship recyclers have resisted dropping their offer levels for incoming tonnage. Instead, they have chosen a selective approach, bidding cautiously and showing interest primarily in smaller vessels. Large deals have remained scarce, while most buyers seem to be adopting a “wait-and-watch” stance, reluctant to commit until stronger economic signals emerge.
However, industry insiders maintain that seasonal buying, especially in the run-up to Diwali, may bring some relief. Traditionally, this period has been associated with improved steel consumption, which could provide Alang with the momentum it currently lacks.
A glance at this month’s arrivals and beachings underlines the ongoing mixed trend. Vessels like the Kosta, a 20,841 LDT bulker, and Bonita, a 10,201 LDT bulker, have already beached successfully, while others such as the Ali S and Trust remain in anchorage, awaiting their turn. Arrested vessels like Conico Atlas and Nirvana also continue to linger on the sidelines, highlighting the regulatory complexities that sometimes delay recycling operations.
The current price band at Alang reflects stability on the surface, with tankers fetching around USD 420–430 per LDT and bulkers between USD 410–420 per LDT. General cargo units are holding between USD 400–410 per LDT, while container vessels command slightly better prices in the USD 440–450 per LDT range. Yet, this stability belies the cautious undertone that pervades the market, where recyclers appear more intent on protecting margins than chasing volumes.
Chattogram: Optimism Tempered by Financial Strain
In neighboring Bangladesh, the Chattogram ship recycling market presented a slightly different picture. Here, domestic steel prices have shown encouraging signs of recovery, with both plates and scrap registering upward movement. This has fueled a sense of cautious optimism among local recyclers, some of whom have indicated a willingness to raise offers for available ships.
Yet, the sector continues to face formidable barriers. Chief among them is the chronic shortage of foreign exchange, which has plagued Bangladesh’s industrial landscape for much of the past two years. Without reliable access to dollars, recyclers are often unable to complete transactions or finance imports, forcing many to maintain a defensive stance despite the promising steel environment.
Adding to the challenges are administrative delays tied to the enforcement of the Hong Kong International Convention (HKC) for Safe and Environmentally Sound Recycling of Ships. Bangladesh ratified the treaty in 2023, but implementation has been slower than expected, leaving several yards in limbo and constraining the market’s overall capacity.
Notable arrivals at Chattogram this month included the Crystal, a 7,052 LDT tanker beached on 22 September, and the Rade, a massive LNG carrier with a light displacement of 29,940 tonnes that was beached a day earlier. The DK 03, a bulker arrested in August, remains in anchorage.
Chattogram’s price levels mirror Alang’s, with tankers in the USD 420–430 per LDT band, bulkers in the USD 400–410 range, and containers fetching as much as USD 440–450. The sentiment here remains cautiously stable, with traders watching closely to see if foreign exchange restrictions ease in the months ahead.
Gadani: Pakistan’s Market Struggles for Traction
Further west, Pakistan’s Gadani market has struggled to gather momentum. Market activity this week was sparse, with most buyers shying away from major commitments. The domestic steel sector has been weighed down by a flood of cheaper materials arriving from neighboring countries, placing further pressure on local producers and, by extension, recyclers.
Like Bangladesh, Gadani’s industry also faces compliance hurdles with the HKC, which continue to slow progress and discourage potential buyers. While steel and scrap prices in Pakistan have managed to remain steady, offer levels from recyclers have softened slightly as they attempt to stay competitive in a crowded regional market.
The Fortune Ocean, a general cargo vessel of 2,261 LDT, remains in anchorage awaiting beaching clearance, symbolizing the subdued pace of the market. For now, tankers in Gadani command between USD 430–440 per LDT, while bulkers range from USD 420–430. Though these prices appear marginally higher than those at Alang or Chattogram, the lack of active buyers means few deals are being finalized.
Industry watchers believe the end of the monsoon season could help restore some activity, but whether this will be sufficient to overcome structural challenges remains uncertain.
Aliaga: Turkey Stays in a Holding Pattern
Meanwhile, Turkey’s Aliaga market continues to tread water. The week passed without significant movement in pricing or transaction volumes. Domestic steel prices have held stable, but demand remains subdued, leaving recyclers with little incentive to adjust their offers.
For non-EU ships, prices currently hover between USD 280–290 per LDT for tankers, USD 260–270 for bulkers, and USD 250–270 for multipurpose or general cargo ships. Containers fetch slightly more, at USD 280–290. EU-designated vessels, however, see discounts of USD 20–30 per tonne due to regulatory conditions.
This stagnation reflects broader economic uncertainties in Turkey, where buyers appear reluctant to make major commitments until clearer signals emerge on both domestic and international steel demand.
Historical Perspective: A Market That Has Seen Sharper Highs
A review of the five-year price history underscores the industry’s current struggles. At Alang, prices peaked at USD 570 per LDT in 2022 but have since slipped back to around USD 480 in 2024 and now hover in the USD 420–430 range. Chattogram saw an even sharper correction, from USD 600 in 2022 to USD 470 in 2023 before modestly recovering to USD 500 in 2024. Gadani followed a similar trajectory, while Aliaga has managed to maintain slightly better consistency, averaging around USD 320 in 2024.
These figures highlight the volatility of the sector, where global steel cycles, freight markets, and environmental regulations collectively shape fortunes.
Deals of the Week: Selective Buying
Despite the broader caution, a handful of sales were finalized. The Kosta, a Japanese-built bulker of 20,841 LDT, was delivered to Alang, while the Ali S, built in Poland in 1993, also made its way to the Indian yards. Chattogram secured the Asian Enterprise, a 9,016 LDT bulker, at USD 425 per LDT, while the AE Gas, an LPG carrier, sold at USD 390 “as is” in Batam, Indonesia.
Notably, the Niigata Trader, a Dutch-built container ship of 4,090 LDT, commanded a robust USD 480 per LDT, delivered to the sub-continent on buyers’ option. These transactions reflect the continued premium that high-quality tonnage and specific vessel types can attract, even in a cautious market.
Outlook: Waiting for the Festive Season Spark
Looking ahead, the ship recycling markets across South Asia appear set to remain stable but subdued in the immediate term. Much will depend on how the domestic steel industries in India, Bangladesh, and Pakistan respond to seasonal demand and whether financial and regulatory bottlenecks can be eased.
For Alang, the upcoming festive season could provide a short-term lift, while Bangladesh’s prospects hinge on foreign exchange stabilization. Pakistan will need both stronger steel demand and regulatory clarity to regain momentum, while Turkey will continue to watch its steel industry for cues.
For now, recyclers are holding their ground, resisting deep price cuts while bracing for the possibility of better times ahead. The sector’s resilience lies in its ability to adapt to shifting steel cycles and regulatory landscapes, but patience appears to be the watchword as September draws to a close.
Author: shipping inbox
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