The global ship recycling market entered Week 23 of 2026 with a major shift in the wider maritime landscape: traffic through the Strait of Hormuz has started to recover after weeks of disruption. This has improved sentiment across energy and shipping markets, but for ship recycling, the timing remains difficult. The pre-monsoon beaching window across the Indian subcontinent has now effectively closed, leaving demand intact but vessel supply still limited.

Reports during the week indicated that vessel movements through the Strait of Hormuz have picked up materially over the past fortnight, with ships transiting in coordination with the US military. However, traffic remains below pre-conflict levels, and the formal US-Iran framework remains unsigned.

The reopening is therefore taking place in practice before full diplomatic normalisation has been confirmed. For the maritime industry, this is an important development, but it does not yet represent a complete return to normal energy flows or regional security conditions.

Brent crude eased into the USD 95–97 per barrel range during Week 23 as markets priced in lower geopolitical risk and the possibility of improved Middle East energy movement. This marks a sharp reduction from the war-premium levels seen earlier in the quarter.

Lower crude prices may eventually reduce bunker-cost pressure and improve operating economics across shipping markets. However, the benefit to ship recycling is not immediate, as vessel owners are still being supported by strong freight earnings.

Freight remained one of the strongest reasons why recycling supply has not improved. The Baltic Dry Index moved above 3,200, while Capesize earnings touched nearly USD 49,500 per day.

At these levels, many owners continue to see better value in keeping older vessels trading rather than selling them for demolition. This has kept recycling candidates scarce despite improved sentiment, easing oil prices, and stable financing conditions in key recycling markets.

Bangladesh remains one of the most stable recycling destinations in the subcontinent. The Bangladeshi Taka continued to hold within its established trading band, while Chattogram demand remained firm.

Local steel prices also stayed relatively steady, supporting Bangladesh’s position as the leading recycling destination for the week. However, the pre-monsoon beaching window has effectively closed. Chattogram still has the demand and financing to absorb tonnage, but weather conditions are now becoming the main operational constraint.

India saw the Rupee recover for a third consecutive week, supported by Reserve Bank of India measures and a softer US Dollar. Local steel prices at Alang improved in US Dollar terms, and India’s compliance profile remains strong, with more than 110 yards holding valid Statements of Compliance.

Despite these positives, Alang remains the lowest-priced major subcontinent destination and continues to face limited vessel supply. The stronger Rupee and firmer steel market have not changed the central issue: ships did not arrive before the monsoon window closed.

Pakistan continues to stand out as the strongest currency story in the basin. The Pakistani Rupee firmed to its strongest level of 2026 and remains the only subcontinent currency to have appreciated against the US Dollar through the conflict period.

Gadani also continues to hold the strongest local steel pricing in the region, keeping Pakistan in a firm second position behind Bangladesh in the weekly market rankings. However, like other destinations, Pakistan has not received the volume of recycling tonnage that its pricing and currency stability would normally attract.

Turkey remained close to recent Lira lows, with Aliaga still structurally uncompetitive for mainstream ship recycling tonnage. Turkey’s market continues to be driven more by domestic inflation and currency pressure than by developments around Hormuz.

Aliaga remains focused on EU-regulated tonnage, where compliance requirements matter more than price. This keeps Turkey relevant in a specialist segment, but outside the mainstream subcontinent competition for larger recycling units.

The main theme for Week 23 is the mismatch between improving macro sentiment and unchanged recycling fundamentals. Traffic through Hormuz is returning, Brent crude has eased, and currencies in parts of the subcontinent have improved. Yet vessel supply remains scarce, freight earnings remain strong, and the monsoon has now closed the practical beaching window.

For cash buyers, recyclers, shipowners, and maritime market participants, the immediate outlook remains cautious. The industry may benefit from lower energy risk and improved sentiment in the months ahead, but the near-term recycling opportunity has been delayed by seasonality and limited vessel availability.

Traffic through the Strait of Hormuz is returning, but the ship recycling market has not received the tonnage it needed in time. Demand remains firm, financing is available, and pricing is stable across key destinations, but the monsoon has changed the market’s immediate direction.

The traffic returns. The window is gone.