New Bulker Recycling Sales Highlight Stark Price Gap Between Aliaga and Alang
The global ship recycling industry has once again been reminded of the vast pricing gap between markets in Europe and South Asia, as two newly reported bulker sales show owners securing nearly double their money by sending ships to India instead of Turkey. The deals, revealed in the latest weekly recycling market reports, underline the ongoing competitive disadvantage faced by Turkey’s Aliaga shipbreaking yards compared to their counterparts in Alang, despite the former’s strong environmental and safety credentials.
The most striking detail of these sales lies in the price difference. A bulk carrier committed to Turkish recyclers fetched just $250 per light displacement ton (ldt), while another bulker headed for India managed an impressive $468 per ldt. For owners, the arithmetic is hard to ignore: the choice between Aliaga and Alang can make or break the economics of recycling an older vessel, particularly in an industry where timing and market cycles already exert significant pressure on returns.
One of the ships, the Bontrup Pearl, has been a familiar sight in the Pacific in recent years, delivering rocks for a large-scale sea wall project in the Marshall Islands. With its work now concluded, the vessel has reached the natural end of its commercial life and is being sent for dismantling. Reports suggest the owners opted for South Asia, where the stronger price was too attractive to resist, even though Indian recyclers are only just beginning to align with international environmental and labor safety expectations under the Hong Kong Convention framework.
This divergence in returns is not new, but it is becoming more pronounced as global steel fundamentals remain under pressure. South Asian yards, especially in Alang, continue to offer higher rates to attract tonnage, driven by stronger demand for scrap steel in their domestic markets. By contrast, Aliaga’s EU-approved facilities, which must comply with stringent European Union Ship Recycling Regulation (EU SRR) requirements, are constrained in how much they can bid. These yards are also hampered by higher labor costs, stricter waste disposal rules, and limited domestic steel demand compared to the booming economies of India and Bangladesh.
For shipowners, the dilemma is increasingly stark. On one hand, recycling in Aliaga ensures compliance with the highest international standards for worker safety and environmental protection, aligning with the expectations of regulators, financiers, and charterers who are increasingly scrutinizing Environmental, Social, and Governance (ESG) practices. On the other hand, opting for South Asia brings a far more lucrative payout, sometimes amounting to millions of dollars in additional revenue on a single recycling deal.
Industry experts note that the current spread of more than $200 per ldt between Turkish and Indian bids is among the widest seen this year. For a large bulk carrier of 20,000 ldt, the difference can exceed $4 million—a gap few owners can ignore, particularly in a market where freight earnings remain volatile and asset values are under pressure from oversupply and decarbonization regulations.
The case of the Bontrup Pearl illustrates the broader trend. Having served faithfully in heavy-lift operations, the vessel’s final contribution will now be to provide valuable scrap steel for India’s construction and manufacturing industries. Yet her departure also raises uncomfortable questions about the uneven playing field in global ship recycling. While European authorities have long promoted Aliaga as the preferred choice for responsible recycling, shipowners continue to vote with their wallets, sending tonnage eastward in pursuit of higher returns.
This imbalance is not only a matter of economics but also of policy. The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC), adopted by the International Maritime Organization in 2009, was designed to create a global framework for safer, cleaner recycling. India, along with Bangladesh and Pakistan, has made strides toward compliance, upgrading facilities and worker practices to align with HKC standards. However, the EU SRR still imposes stricter criteria, effectively sidelining South Asian yards from European-flagged tonnage. In practice, this means that EU-approved Aliaga remains the main destination for owners bound by EU regulations, but for the wider market, Alang continues to dominate due to its far more attractive economics.
Market watchers suggest that unless the price gap narrows, the industry will continue to see the majority of ships head to South Asia. Some predict that even environmentally conscious owners may find themselves under pressure from shareholders to prioritize financial returns. Others, however, argue that as the green transition gathers momentum, recycling practices will come under greater scrutiny, and the reputational risks of sending ships to non-EU yards could outweigh the financial incentives.
For now, though, the numbers tell their own story. A Turkish offer of $250 per ldt simply cannot compete with an Indian bid of $468, especially when multiplied across a large bulk carrier. Owners facing the end of life for their assets are naturally inclined to maximize returns, and Alang’s market reality remains far more compelling.
The Bontrup Pearl’s final voyage is thus emblematic of the choices confronting shipowners worldwide. Between the promise of responsible recycling in Aliaga and the hard cash offered in Alang, most appear to be following the money. Until global frameworks succeed in harmonizing both standards and economics, the recycling map will remain tilted toward South Asia, where higher steel demand and more aggressive pricing continue to draw in the majority of the world’s retiring fleet.
As the latest deals show, the divide is not merely academic. It is a question of millions of dollars, shifting competitive advantages, and the future shape of the ship recycling industry. For Aliaga’s certified yards, the challenge is to remain relevant in a market where compliance comes at a cost, and for Alang’s emerging HKC-compliant facilities, the opportunity lies in proving they can offer both financial returns and responsible practices. The next few years may determine whether the industry can reconcile these competing forces—or whether price alone will continue to dictate the final journeys of the world’s ships.
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