The recent accession of Bangladesh and Liberia to the International Maritime Organization’s (IMO) Hong Kong Convention (HKC) has significant implications for ship owners seeking to dispose of end-of-life ships. The HKC, originally adopted by the IMO in 2009, sets global standards for safe and responsible ship recycling.
With the HKC entering into force on June 26, 2025, ship owners and operators will face increasing pressure to ensure that end-of-life ships are disposed of in compliance with the convention. However, there are still rogue operators in certain regions where the global safety framework has little influence.
Pakistan, as the third largest ship recycling nation, is expected to face challenges in attracting sellers due to the lack of efforts by its yard owners and managers to upgrade facilities to meet HKC standards. Unlike India and Bangladesh, Pakistan has made few or no moves to comply with the convention, rendering the Gadani ship recycling yard virtually redundant as a viable destination for subcontinent recycling, according to GMS, the world’s largest cash buyer of end-of-life ships.
The situation in Pakistan is further complicated by the country’s deepening economic crisis, which has led to a request for emergency funds from the International Monetary Fund (IMF). The IMF and Pakistan have tentatively agreed on a $3 billion emergency bailout, although the agreement has not been finalized. As a result of the financial crisis, Pakistan’s central bank has been forced to restrict or refuse to issue letters of credit to fund end-of-life ship acquisitions, making significant ship recycling deals unfeasible.
The Eid holidays have also contributed to a quiet period in the recycling sector as a whole. GMS notes that price ideas being discussed in the market are significantly lower than prevailing market prices, and until liquidity issues in the industry improve, local markets are unlikely to make much sense.
GMS estimates that Bangladesh offers the highest prices among the subcontinent breakers, with container ships fetching around $625 per lightweight displacement ton (ldt), tankers at $605, and bulk carriers at $575. In comparison, theoretical price levels in India and Pakistan are approximately $60-80 lower. Turkey’s typical prices for the same ship types were $340, $330, and $320, respectively, last week.