20 Jul 2026
The global ship recycling market entered Week 29 of 2026 under renewed geopolitical pressure, firmer freight markets and severe operational disruption in Bangladesh.
The United States reinstated its naval blockade of Iranian ports following five consecutive days of strikes against positions around Bandar Abbas, Qeshm Island and Sirik. The blockade produced an immediate enforcement action when a Curacao-flagged tanker reportedly continued toward Kharg Island after repeated warnings and was disabled by a targeted strike on its smokestack. Two other vessels were redirected without incident.
The renewed escalation has increased uncertainty around Gulf vessel movements, war-risk premiums and the timing of recycling decisions. The expected flow of ageing vessels from the Gulf remains delayed as owners reassess routing, insurance exposure, freight earnings and the security situation around the Strait of Hormuz.
Brent crude reached approximately USD 84.77 per barrel during the week, while WTI touched USD 79.56. Both were one-month highs.
Oil has now followed a similar escalation pattern several times during 2026: geopolitical tension pushes prices higher, de-escalation removes part of the premium, and renewed conflict restores it.
The latest increase remains smaller than the initial wartime surge, suggesting that oil traders have become more familiar with the conflict cycle. Nevertheless, the reinstated blockade and renewed discussion around Iran’s Kharg Island export terminal continue to present material risks to energy flows and maritime operations.
Freight markets strengthened independently of the renewed conflict.
The Baltic Dry Index closed at 2,944, its highest level since early June, while the Capesize index rose to approximately 4,655 on sustained iron ore and coal demand.
Firm dry bulk earnings continue to give owners of ageing vessels an incentive to remain in commercial service. This weakens the immediate case for recycling, particularly for larger bulk carriers that can still generate attractive daily returns.
Higher oil prices and war-risk costs are also increasing the expense and complexity of moving vessels toward recycling destinations. The combination of firm freight and geopolitical uncertainty is therefore extending the wait for the anticipated recycling-candidate wave.
The most serious developments this week were humanitarian rather than commercial.
Flooding and landslides across Chattogram, Cox’s Bazar and neighbouring districts have killed at least 51 people, injured dozens and affected more than one million residents. A landslide inside a Rohingya refugee camp in Cox’s Bazar killed 16 people, including children, while an embankment failure on the Khowai River flooded numerous villages in Habiganj.
Nearly 50,000 people were reported to be in emergency shelters, and government agencies were placed on maximum alert.
Against this backdrop, the disruption to ship recycling is secondary but significant. Beaching activity at Chattogram has slowed to a near-halt for a second consecutive week. Cash buyer enquiries remain limited, local steel trading has been suspended and the July 14–17 tide window closed with little activity.
The next major delivery window is scheduled for July 29 to August 1, but its usefulness will depend on weather conditions, yard access and the recovery of surrounding infrastructure.
Bangladesh remains the highest-ranked ship recycling destination, but sentiment has softened. Week 29 indications were:
Dry bulk: USD 448–453 per LDT
Tankers: USD 468–473 per LDT
Containers: USD 478–483 per LDT
The Bangladeshi Taka held near 123.30 against the U.S. dollar. Foreign exchange reserves received support from the IMF’s confirmed USD 1.3 billion disbursement following progress on economic reforms.
The Indian Rupee weakened to approximately 96.40 against the U.S. dollar, its weakest level since May, before recovering slightly toward 96.20.
India’s June inflation increased to 4.38%, up from 3.93% and above market expectations. Transport inflation reflected the delayed impact of the earlier energy shock, while food prices also increased.
Local steel plate prices at Alang firmed from approximately INR 37,200 to INR 37,500 per ton. In U.S. dollar terms, however, the increase was limited by Rupee weakness, with prices remaining near USD 386–388 per ton.
India continues to offer the deepest recycling capacity and strongest compliance infrastructure in the sub-continent, with around 110 valid Statements of Compliance. However, Alang remains the lowest-priced South Asian recycling destination.
Week 29 indications were:
Dry bulk: USD 418–423 per LDT
Tankers: USD 438–443 per LDT
Containers: USD 448–453 per LDT
The Ocean Fortune, a 9,340 LDT bulk carrier, was delivered at Alang during the week, while the 11,215 LDT tanker Neptune Grace arrived.
Pakistan’s currency and steel markets remained comparatively stable.
USD/PKR closed near 278.15 after trading within a very narrow range. The Pakistani Rupee has shown limited reaction to several rounds of geopolitical escalation during 2026.
The reinstated U.S. blockade is geographically relevant to Gadani. War-risk premiums for Gulf-transiting recycling tonnage have begun increasing again, although from relatively low levels.
This creates two competing effects for Pakistan. Gadani’s proximity to Gulf shipping may improve its strategic relevance, but heightened risk may also discourage owners from moving vessels toward recycling.
Local steel plate prices remained near PKR 195,000 per ton, equivalent to approximately USD 700.
Week 29 indications were:
Dry bulk: USD 443–448 per LDT
Tankers: USD 463–468 per LDT
Containers: USD 473–478 per LDT
The 8,760 LDT bulk carrier Amber Star was delivered at Gadani, while the 7,905 LDT Coral Wave arrived.
Turkey’s central bank maintained its policy rate at 37% for a third consecutive meeting, citing renewed energy-price volatility and continuing inflation risks.
The Turkish Lira weakened to another record level near 47.1 against the U.S. dollar.
Official annual inflation stood at 32.11%, while independent estimates remained materially higher. Both official and independent measures indicated some improvement during June, but the renewed rise in oil prices may limit further progress.
Aliaga remains structurally below South Asian recycling prices. Its market continues to be shaped primarily by EU regulation and Basel Convention requirements rather than mainstream price competition.
Week 29 indications were:
Dry bulk: USD 263–265 per LDT
Tankers: USD 273–275 per LDT
Containers: USD 283–285 per LDT
Bangladesh - Softening
Pakistan - Steady
India - Steady
Turkey - Softening
Bangladesh continues to offer the highest indicative prices, but flooding has severely restricted activity. Pakistan remains the most stable market, India retains the strongest capacity and compliance position, and Turkey continues to operate within its separate regulatory niche.
The ship recycling market remains caught between geopolitical risk, firm freight earnings and seasonal disruption.
The renewed blockade is increasing uncertainty around Gulf vessel movements. Stronger dry bulk earnings are encouraging owners to keep ageing vessels in service, while higher oil and insurance costs are complicating delivery to recycling destinations.
At the same time, severe flooding has temporarily removed much of Chattogram’s operational capacity from the market.
The deferred recycling wave has not disappeared, but its timetable remains uncertain. Future supply will depend on the security situation in the Strait of Hormuz, freight-market strength, monsoon conditions and the recovery of Bangladesh’s yard infrastructure.
Blockade returns.
Oil climbs.
Flood toll rises.
Yards stall on.
The main factors are the renewed U.S. blockade of Iranian ports, Brent crude approaching USD 85, firm dry bulk freight and severe flooding in Bangladesh.
Bangladesh remains the highest-priced market, although flooding has softened sentiment and brought much of Chattogram’s activity to a halt.
Firm freight earnings are encouraging owners to continue trading. Higher oil prices, war-risk premiums and uncertain Gulf routing are also delaying recycling decisions.
India continues to offer the sub-continent’s deepest capacity and strongest compliance footprint, with around 115 valid Statements of Compliance.
The underlying demand and financing structure remains available, but activity depends on flood recovery, yard access and the next delivery tide from July 29 to August 1.
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