Ship Recycling: The market depicted by low demand for both scrap and vessels: STAR ASIA
Trump’s 25% tariffs on steel and aluminium imports could trigger significant ripple effects across global steel markets and trade dynamics. Since the U.S. is a major steel consumer and relies heavily on imports from Canada, Brazil, and Mexico, these protectionist measures could fundamentally reshape supply chains and pricing structures.
The immediate implications for global steel markets could be substantial. The announcement is likely to cause price volatility in steel markets worldwide, as exporters who previously targeted the U.S. market may need to redirect their volumes to alternative destinations. This could potentially lead to oversupply in other regions, particularly in Asia and Europe, where markets are already struggling with overcapacity issues. Moreover, the announcement’s timing coincides with ongoing global concerns about overcapacity in the steel industry, particularly as China’s property sector struggles continue to impact global steel demand.
For the recycling markets, these tariffs could create new opportunities but also challenges. Higher domestic steel prices could make recycled steel more attractive, potentially benefiting the ship recycling sector. However, the broader market uncertainty
and potential trade retaliation from affected countries could lead to more complex and volatile trading patterns in the scrap metal market, affecting both pricing and supply chain dynamics.
The anticipated surge of end-of-life vessels into demolition markets has slowed, as shipowners remain reluctant to offload aging fleets. Despite expectations of an influx, the steady trickle of supply is sustaining market activity without overwhelming it.
Industry participants note that favourable charter rates encouraged owners to retain vessels longer than projected. This measured pace of supply has helped maintain price stability in the ship recycling sector, preventing a sudden glut that could pressure market dynamics.
For now, the ship recycling market remains adequately supplied, avoiding the volatility in the price change.
Alang
India’s market continues with a period of subdued activity, depicted by low demand for both scrap and vessels, though the sector shows remarkable preparedness for upcoming European Union regulatory changes.
At the recent Steel Scrap 2025 conference, Zain Nathani, managing director of Nathani Group spoke about how India has secured full government backing and proactively addressed initial EU requirements regarding scrap grade specifications, positioning itself well ahead of the 2027 Waste Shipment Regulation implementation.
Despite current market challenges and a disappointing union budget that offered limited relief, the long-term outlook shows promise with several strategic initiatives underway.
The extension of the Extended Producer Responsibility (EPR) principle could significantly boost domestic scrap supply, particularly if applied to the steel and automotive sectors.
This week, The Central Board of Indirect Taxes and Customs (CBIC) is assessing the imposition of a safeguard duty on steel imports to counter a surge in low-cost supplies, particularly from China. This review follows the government’s recent overhaul of the customs duty framework, which reduced the average duty rate from 11.66% to 10.66% to align with ASEAN levels.
With domestic steel manufacturers facing price pressures and increased competition, authorities are considering a safeguard duty of 15-25% to protect local producers from unfair trade practices. The move comes as global steel markets experience heightened volatility, with concerns over dumping from Chinese suppliers.
The government is also pushing for diversified raw material sources and sustainable steel production to strengthen the industry. The final decision on the safeguard duty will factor in trade relations and economic implications as policymakers navigate India’s evolving trade landscape.
Chattogram, Bangladesh
Bangladesh’s ship recycling market continues to operate at a subdued pace, with recyclers adopting an increasingly cautious approach amid a lack of new government projects and challenging market conditions.
Recyclers have bought sufficient ships ahead of Ramadan and the 31st March deadline set by the environmental authorities to complete their yards in compliance with the guidelines set.
Gadani, Pakistan
Pakistan’s ship recycling market remains quiet, with persistent inactivity marking recent weeks, though broader developments in the country’s steel sector could influence future market dynamics.
Of particular interest is Russia’s continued engagement in potentially reviving the Pakistan Steel Mills (PSM), despite its substantial PKR 345 billion debt burden, with a Russian technical team recently completing their assessment of the facility.
While PSM’s revival could significantly boost Pakistan’s domestic steel production capacity and reduce its dependence on imports – currently producing only 3.8mt against an annual demand of 7.3mt – the industry faces deeper structural challenges, including regulatory weaknesses that allow substandard steel into the market. This situation affects not only the recycling sector but the entire steel industry ecosystem, where 20 major companies including Amreli, Agha, and Mughal Steel dominate 80% of a market comprising approximately 600 mills.
Anchorage & Beaching Position (FEBRUARY 2025)
Aliaga, Turkey
Turkey’s market remains stagnant, with shipbreaking scrap prices holding steady at US$340-355 per ton delivered, though most mills are clustering at the higher end of this range. The broader market sentiment remains wary amid ongoing debates about the potential impact of US tariffs on scrap supply and pricing, while Turkish mills exercise prudence in their scrap purchases due to weak steel sales.
The situation is further nuanced by Turkey’s shifting trade patterns. Exports to the EU, which surged 80% last year, are now potentially under threat, though new regulations easing restrictions on Syrian trade could offer some relief. Despite expectations of a pre- Ramadan demand surge in the coming weeks, current market conditions remain quelled.
Sub-Continent and Turkey ferrous scrap markets insight
Sub-continent and Turkish ferrous scrap markets saw moderate gains over the past week, with Turkey, Pakistan, and Bangladesh witnessing slight price increases, while India’s import demand remained weak. U.S. scrap offers firmed due to rising domestic costs and deep-sea demand, while Japan’s H2 scrap prices softened.
India: Weak Demand Limits Import Activity
India’s imported scrap market saw marginal price increases, but buying interest remained muted due to slow finished steel sales and a depreciating rupee against the U.S. dollar. UK-origin shredded scrap rose 2% w-o-w to US$380/ton CFR from US$373/ton, though higher import costs and competitive domestic alternatives deterred buyers.
Pakistan: Procurement Increases Ahead of Ramadan
Pakistan’s imported scrap market saw higher procurement than India this week, as some buyers restocked ahead of Ramadan. However, overall sentiment remained cautious due to price volatility and liquidity concerns. Shredded-UK, CFR Pakistan rose 2% w-o-w to US$388/ton from US$380/ton.
iquidity constraints and sluggish rebar sales kept market activity moderate. While domestic scrap and rebar prices remained stable at PKR 140,000-145,000/ton and PKR 245,000-255,000/ton, respectively, mills operated at varying capacities. Some continued to run at reduced levels due to weak domestic steel demand.
UK/Europe-origin shredded scrap was offered at US$385-390/ton CFR Qasim, while UAE- origin shredded stood higher at US$395/ton CFR. Despite stable local scrap prices, mills limited large-scale purchases, reflecting the cautious market sentiment.
Bangladesh: Limited Buying Despite Price Uptick
Bangladesh’s imported scrap market remained sluggish despite a 1% w-o-w price increase. Shredded-UK, CFR Bangladesh rose to US$388/ton, though weak steel demand, slow construction activity, and a lack of new government projects kept mills wary.
Local scrap shortages persisted, yet buyers refrained from large bookings, opting instead to closely monitor global price trends. Some mills showed interest in Japanese, Malaysian, and Singapore-origin scrap, though overall buying remained slow.
Letter of credit (LC) challenges continued to weigh on the market, though conditions slightly improved, allowing for selective restocking. Australian shredded stood at US$370- 375/ton CFR, while U.S. shredded was offered at US$365-370/ton CFR.
Although a few mills restocked ahead of Ramadan, overall sentiment remained weak. Domestic scrap and shipbreaking materials continued to be the preferred sources, limiting bulk import activity.
Turkey: Prices Rise Despite Cautious Buying
Turkey’s imported scrap market posted a 2% week-on-week (w-o-w) increase, with HMS (80:20)-US, CFR climbing to US$360/ton from US$354/ton. Recyclers maintained firm offers, slowing restocking efforts by mills, while weak rebar demand kept buyers cautious.
A key U.S.-origin deal pushed prices higher, prompting Baltic-origin sellers to raise offers, though European recyclers were more flexible, with HMS offers in the US$350-358/ton CFR range. U.S. recyclers remained bullish, supported by strong domestic demand and the introduction of new tariffs on steel and aluminium imports.
Despite the price uptick, Turkish mills resisted further hikes. Rebar prices edged up to US$565/ton FOB, but sluggish demand limited buying interest. Market participants closely monitored developments on U.S. tariffs, with expectations that scrap prices may stabilize in the coming weeks.
