13 Jul 2026
The global ship recycling market entered Week 28 of 2026 under renewed geopolitical and operational pressure. The three-week truce surrounding the Strait of Hormuz broke down after projectiles struck three tankers on July 6 and 7, followed by expanded military action across the region. Although the strait has not fully closed, vessel transits have declined again and visible traffic is increasingly using approved routes, adding fresh uncertainty for shipowners and recycling candidates.
Brent crude rose 5.2% to approximately USD 78 per barrel before easing toward USD 77, reversing part of the decline recorded during the peace period. The Baltic Dry Index also strengthened for a sixth consecutive session to 2,875, its highest level since June 8, while the Capesize Index reached 4,514 on firmer iron ore and coal demand. Higher oil prices and stronger freight earnings have again increased the incentive to keep ageing vessels trading, delaying recycling decisions.
For the ship recycling market, the anticipated Gulf exit wave is no longer progressing on a clear timetable. The previously identified queue of approximately 550 merchant vessels remains relevant, but renewed security concerns are causing owners to reassess vessel movements and recycling plans. The supply outlook is now being delayed by both geopolitical risk in the Strait of Hormuz and monsoon disruption across South Asian recycling destinations.
Bangladesh remains the highest-priced recycling market, but sentiment softened during the week. Severe flooding across Chattogram Division disrupted yard production, local steel trading, transport and cash buyer activity. At least 17 districts were placed under short-term flood warnings, with several rivers at or above danger levels. The latest available steel indication remained near BDT 66,000 per ton, or approximately USD 535 per ton, while no trading was reported during the latter part of the week.
Bangladesh’s macroeconomic position showed some improvement. June inflation eased to 9.16%, foreign exchange reserves remained near USD 34.12 billion, and the IMF moved toward releasing USD 1.3 billion following progress on reforms. USD/BDT held around 123.2 to 123.3, above its former trading band. Letter of Credit availability and recycling plot capacity remain supportive, but the immediate market is constrained by flooding and reduced yard activity.
India’s Rupee weakened to around 95.50 against the US dollar, reaching a one-month low as higher oil prices and US interest-rate expectations pressured the currency. The Reserve Bank of India reportedly sold dollars through state-run banks near the 95.50 level. Alang steel prices firmed from INR 36,500 to INR 37,000 per ton, equivalent to approximately USD 383 to USD 388 per ton.
India remains the lowest-priced South Asian ship recycling destination. Alang continues to offer the basin’s deepest yard capacity and strongest compliance position, with more than 110 valid Statements of Compliance. However, monsoon conditions, weak pricing and renewed Gulf uncertainty continue to delay the routing of vessels toward Indian yards.
Pakistan remained comparatively stable. USD/PKR held near 278, close to its strongest level of 2026, while local steel plate prices remained around PKR 195,000 per ton, or approximately USD 700 per ton. Gadani may regain some locational relevance if Gulf disruption persists, but renewed conflict may also discourage owners from moving vessels toward recycling.
Pakistan’s July 1 duty changes remain an important domestic factor. Lower duties on imported HR prime, wire rod and scrap may increase pressure on locally recycled and re-rolled steel. Pakistan therefore enters the renewed conflict with a stable currency and strong steel pricing, but with policy and regional shipping risks moving in opposite directions.
Turkey’s June inflation eased to 32.11% year on year, down from 32.61% in May, while monthly inflation slowed to 0.99%. The improvement reflected lower transport and energy pressure during the peace period. However, Brent’s return toward USD 77 to USD 78 threatens to weaken that disinflation trend.
The Turkish Lira remained near a record low of 46.7 against the US dollar. Aliaga recycling prices stayed between USD 266 and USD 288 per LDT across vessel types, leaving Turkey well below South Asian market levels. Aliaga remains a compliance-led and regulation-driven recycling market rather than a mainstream price competitor.
GMS market rankings for Week 28 placed Bangladesh first, with softening sentiment and dry bulk indications at USD 455 to USD 460 per LDT. Pakistan ranked second at USD 443 to USD 448 per LDT, India third at USD 418 to USD 423 per LDT, and Turkey fourth at USD 266 to USD 268 per LDT for dry bulk vessels.
The main story for Week 28 is the return of uncertainty. The truce has broken, oil and freight have moved higher, Chattogram yards are facing severe flooding, and the expected recycling supply wave is again being delayed. The market now depends on both the security situation in the Strait of Hormuz and the operational impact of the South Asian monsoon.
Truce breaks.
Brent jumps.
Rivers rise.
Yards stall.
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