Ship Recycling: Activities Resumed post HKC implemention: STAR ASIA

Ship Recycling: Activities Resumed post HKC implemention: STAR ASIA

Ship recycling markets across the Indian Subcontinent have resumed activity following the implementation of the Hong Kong Convention (HKC), but under a drastically revised pricing environment. Weak demand worsened by seasonal monsoons has led to a significant decline in vessel prices across the board.

Despite the resumption in buying, local sales remain limited, with yard inventories still elevated. The subdued pace of domestic steel consumption continues to weigh on sentiment, leaving recyclers hesitant to commit at higher levels.

Looking ahead, ships recyclers anticipate a further leg down in pricing as the industry adjusts to new HKC-aligned protocols and operational requirements. With no immediate recovery in demand expected, the bearish tone in the region’s shipbreaking markets is likely to persist.

Alang, India

Amid a persistently quiet week in India’s ship recycling market, the industry is navigating a subdued demand. While market activity remains steady without major declines, sustained pressure on prices continues due to a softer demand for finished steel.

The most notable development this week is a large-scale inspection drive initiated by State GST (SGST) departments against scrap dealers suspected of tax evasion. This crackdown, targeting fraudulent invoices and illicit tax credits, aims to bring greater transparency to the secondary metals trade and level the playing field for compliant operators.

While the inspections may cause short-term supply disruptions, particularly in northern scrap hubs, any subsequent price support is expected to be limited by the currently weak demand for steel.

Anchorage & Beaching Position (JULY 2025)

Chattogram, Bangladesh

This week, Bangladesh continues to experience a period of notable quiet, with conditions remaining largely unchanged. The prevailing low prices and weak demand from Chattogram have resulted in a distinct lack of offers from local buyers. potential recycling vessels are being directed towards competing markets in Pakistan and India.

This slowdown is significantly influenced by local regulations, as only 12 yards are currently HKC-approved and have already accommodated recent arrivals. For now, however, tight liquidity and a pause in fresh interest ensure that overall market activity in Bangladesh remains muted.

The recyclers who are able to continue buying ships (HKC approved) are offering significantly lower pricing, and for smaller ships weighing 2000 ~ 4000 light displacement tons, the prices have reached sub-US$350/ton levels.

Anchorage & Beaching Position (JULY 2025)

Gadani, Pakistan

The Pakistani market presented a unique, albeit temporary, landscape for owners. Supported by relaxed import regulations for yards undertaking HKC compliance upgrades, Gadani currently stands as the most lucrative destination on the subcontinent in terms of pricing.

Despite this advantage and existing buyer interest, a sense of caution prevails among many shipowners, who remain hesitant to commit vessels due to the ongoing compliance uncertainties. The market is poised for a period of transition, as these essential yard upgrades are expected to take one to two months.

Anchorage & Beaching Position (JULY 2025)

Aliaga, Turkey

The Turkish ship recycling market has remained unchanged this week, continuing the relatively flat trend observed in recent weeks.

Sub-Continent and Turkey ferrous scrap markets insights

India: India’s imported ferrous scrap market continued to be quiet, characterized by cautious buyers and a notable absence of major bookings. Mills are currently less inclined towards imports, preferring to rely on alternative raw materials. Indicative offers for UK shredded material were observed in the range of US$358-362/t CFR Nhava Sheva, while Australian shredded was quoted at US$354-355/t CFR. West African HMS 80:20 hovered around US$334-335/t CFR, with UK busheling commanding a higher premium at US$370-372/t CFR, reflecting its prime quality.

Bangladesh: Bangladesh’s ferrous scrap market largely stayed muted, with trading almost at a standstill. Mills refrained from actively engaging suppliers, even as some freight costs eased, leading to a persistent gap between bids and offers. Buyers were seeking PNS at US$375/t CFR Chattogram, yet suppliers from Hong Kong and Singapore were unwilling to drop below US$380/t. An Australian supplier succinctly described the current conditions as “no good,” citing weak interest from Bangladeshi buyers for imported scrap.

Pakistan: The imported ferrous scrap market in Pakistan remained sluggish, marked by muted trading activity and a cautious buying interest. Suppliers were offering shredded scrap at US$375-380/t CFR Port Qasim, with recent transactions settling narrowly between US$375-378/t, underscoring the weak demand.

Turkey: Turkish imported deep-sea scrap prices held steady day-on-day, as mills largely remained on the sidelines. Despite this price stability, market sentiment stayed cautious, primarily due to weak rebar fundamentals impacting mill purchasing appetites. Conversely, sellers continued to advocate for higher offers, asserting that scrap prices did not warrant a decline given the positive scrap-to-rebar spread.

Indicative tradable levels for EU-origin HMS 80:20 were heard in the range of US$345- 350/t CFR, reflecting ongoing negotiations and quality-based price adjustments within the imported scrap market.

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