Ship recycling has kept its lackluster performance for yet another week. In its latest weekly report, Best Oasis (www.best-oasis.com), a leading cash buyer of ships said that “the ship recycling market remained under pressure this week, with most locations reporting limited activity and softer pricing. In India, the market continued to weaken, with prices slipping slightly amid low demand, tight working capital, and hesitancy from buyers due to ongoing volatility. In Bangladesh, activity stayed subdued with no major sales reported. Market participants are awaiting clarity on NOC issuance, while speculation around a possible extension for non-HKC yards is ongoing. Demand persists for mid-sized units, though financial and geopolitical factors remain in focus. In Pakistan, conditions remained flat, though recent domestic price cuts have added pressure on the recycling sector. Liquidity constraints are growing, and the price environment remains fragile. In Türkiye, the downtrend continued for another week, with both import and local scrap prices declining”.

According to Best Oasis, “broader economic stress and monetary tightening are contributing to cautious sentiment. Ahead of the Hong Kong Convention’s entry into force in June 2025, BIMCO’s Ship Recycling Alliance, along with key industry stakeholders, has submitted a joint paper to the Basel Convention’s COP. The paper calls for the removal of regulatory overlaps between the Basel and Hong Kong Conventions, which could otherwise disrupt cross-border movements of end-of-life ships. The coalition urges the creation of a unified global framework to support safe, transparent, and environmentally responsible ship recycling. With critical policy decisions expected in the coming months, all eyes are now on international regulators to ensure alignment and clarity before implementation begins”, it concluded.

In a separate note this week, shipbroker Intermodal added that “the major ship recycling markets witnessed subdued activity last week, with market sentiment turning cautious amid rising geopolitical and trade tensions, following USTR Notice of Action for fees on Chinese vessels and conflict between India and Pakistan after a deadly attack in Kashmir. In India, the duty of 12% to steel imports aiming to protect the domestic steel sector from the low-cost imports, brought some optimism to the market. yet without being reflected to prices. Despite an uptick in the availability of recycling candidates, activity remains sluggish as buyers adopt a wait-and-see approach amid fears of further escalation of conflict with Pakistan. On a positive note, Indian shipyards’ compliance with HKC provides a significant competitive advantage over regional counterparts, strengthening India’s position as a preferred ship recycling destination. In Bangladesh, HKC compliance remains at the forefront.

The Ministry has halted the issuance of NOCs for imports of recycling to shipyards that have not completed upgrades in line with HKC requirements. With only six out of forty active yards currently HKC-certified and vessels awaiting approvals off anchorage, market activity has stalled. Nevertheless, amid operational risks for many yards and pressure from BSRB, there is optimism within the market that the Ministry may grant an extension until June for HKC-related upgrades, allowing non-compliant yards to resume receiving NOCs. While there is some interest from recyclers, activity has temporarily paused due to the above situation. The Pakistani ship recycling sector continues to struggle, facing limited activity and prevailing uncertainty. Despite earlier offering competitive pricing, Gadani recyclers have struggled to secure available tonnage. Declining local steel prices, persistent pressure on the Pakistani Rupee, and slow progress in achieving HKC compliance have further dampened sentiment. With the monsoon season approaching and the necessity of shipyards to comply with HKC, the outlook for the second half of 2025 remains pessimistic. Finally, in Turkey, the ship recycling market remains under considerable strain. The sector faces growing risks of marginalization in the global ship recycling landscape, with India and Bangladesh poised to dominate in 2025. The Turkish Lira continued its downward trend, weakening by 2% w-o-w versus US Dollar”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide