08 Sep 2026
The global ship recycling market entered Week 36 of 2026 with renewed geopolitical risk, sharply stronger freight markets and a continued shortage of fresh recycling candidates. While physical vessel activity remains visible across South Asia, the flow of new market sales is still limited as strong freight earnings encourage ageing vessels to remain in operation.
Renewed U.S. strikes and Iranian retaliation brought the Gulf back into focus after last week’s attention on sanctions and compliance. Commercial traffic through the Strait of Hormuz continues, but remains below pre-conflict levels. For shipowners, cash buyers and recyclers evaluating Gulf-positioned vessels, passage risk, insurance, physical security and sanctions compliance have all become important considerations when assessing whether a recycling transaction can be safely and commercially completed.
Oil prices responded strongly to the renewed escalation. Brent traded near USD 95.70 per barrel by Friday, while WTI reached approximately USD 91.60, representing weekly gains of around 7% and 10% respectively. Higher crude prices increase voyage and import costs across the major ship recycling destinations at a time when some buyers are becoming more selective.
The strongest signal for recycling supply came from the dry freight market. The Baltic Dry Index climbed to 3,488 on Thursday, its highest level since October 2021, with Capesize and Panamax markets also showing substantial strength. For the ship recycling market, this creates a direct commercial challenge. Older bulk carriers that continue to generate attractive daily earnings give owners less incentive to sell for recycling. Strong freight therefore remains one of the principal reasons fresh recycling candidates are not entering the market in greater numbers.
Despite limited fresh sales, physical activity at the recycling beaches continues as previously secured vessels move through the delivery pipeline. This distinction remains important. Port activity can appear strong even when the current sales market is quiet. No fresh market sales were reported during Week 36, while Pakistan and Bangladesh both softened after their most aggressive recyclers satisfied immediate requirements. India, by comparison, continued to improve from a lower conventional price base.
Pakistan remains at the top of the GMS ship recycling market rankings, although Gadani sentiment is now softening. Week 36 indications stand at approximately USD 500 per LDT for dry bulk vessels, USD 525 per LDT for tankers and USD 535 per LDT for containers. This represents a correction from the exceptional buying levels seen during August, when intense competition for a limited number of vessels pushed Pakistan to the top of the sub-continent market.
The correction reflects fulfilled demand rather than a deterioration in local fundamentals. The 8,128 LDT container vessel Visakha was delivered at Gadani on August 30, while the 5,688 LDT bulker Lina F arrived on September 1 and the 2,632 LDT general cargo vessel Larus arrived on August 27. Local steel remained steady at approximately PKR 200,000 per ton and the Pakistani Rupee held close to PKR 277.42 against the U.S. Dollar. Pakistan’s August inflation reading did rise to 11.1%, but the immediate recycling market continues to be supported by stable steel and currency conditions. The main change is that the most urgent buyers have now covered part of their requirement.
Bangladesh also moved lower this week, with Chattogram indications around USD 475 per LDT for dry bulk vessels, USD 500 per LDT for tankers and USD 510 per LDT for containers. Previously secured tonnage continues to move through the yards, including the 27,824 LDT FPSO Glow, which was delivered on August 30, and the 3,846 LDT bulker Orange Link, delivered on August 29. However, no fresh market sales were reported.
Local steel remained unchanged at approximately BDT 64,000 per ton, while the Bangladeshi Taka strengthened modestly to around BDT 122.79 against the U.S. Dollar. The softer vessel market therefore appears to reflect reduced buying urgency rather than weaker domestic fundamentals.
Bangladesh also received the formal findings of the government investigation into the fatal ship recycling incident in August. The inquiry identified shortcomings in safety supervision and gas-testing procedures, including hydrogen sulphide risks associated with ballast-tank work. The legal process will determine responsibility, while the wider ship recycling industry is expected to place greater attention on ballast spaces, atmosphere testing, high-risk work procedures and recycling certification requirements.
India continues to show the clearest positive movement among the major South Asian ship recycling destinations. Alang remains third for conventional dry bulk and tanker pricing, with indications around USD 465 per LDT for dry bulk vessels, USD 485 per LDT for tankers and USD 495 per LDT for containers. The underlying fundamentals, though, improved during Week 36.
Local steel strengthened to approximately INR 42,100 per ton, while the Indian Rupee appreciated to around INR 94.49 against the U.S. Dollar. This improvement increased the Dollar-equivalent value of local plate from approximately USD 440 per ton to almost USD 446 per ton during the week, giving Alang recyclers stronger purchasing power.
India also received significant international support for the European Commission proposal to include two Indian ship recycling facilities on the European List. BIMCO, European Shipowners, ICS, INTERCARGO, INTERTANKO and the World Shipping Council jointly welcomed the proposal and encouraged policymakers to proceed with the updated List. Final inclusion has not yet been confirmed, but the broad industry support strengthens India’s position in compliant and environmentally responsible ship recycling.
Specialist vessel activity also continues to support Alang. The 18,848 LDT LPG carrier Ble In was delivered on August 26, extending a period of activity involving gas carriers, green ships, non-ferrous-rich units and other higher-value vessels. India remains below Pakistan and Bangladesh for conventional recycling prices, but stronger steel, an improving currency, growing buyer appetite and developments around the European List are narrowing the commercial gap.
Turkey’s Aliaga recycling market remained comparatively steady. Vessel indications continue around USD 262 to USD 284 per LDT depending on vessel type. Turkish annual inflation eased slightly to 31.51%, while the Lira weakened beyond 48.4 against the U.S. Dollar. Turkey continues to compete primarily through regulatory access, Basel Convention compliant recycling and specialist tonnage rather than attempting to match conventional South Asian prices.
The proposed inclusion of Indian facilities on the European List is also relevant to Turkey. If approved, it would gradually expand the number of compliant recycling destinations available to EU-flagged vessels and increase competition in a segment where Turkish recyclers have traditionally benefited from a more limited field of approved facilities.
The key ship recycling market theme entering September is therefore not a shortage of buyer interest, but a shortage of fresh vessels available for recycling. Strong freight markets are encouraging owners to continue trading ageing tonnage, while the leading recycling destinations are processing ships purchased during earlier buying periods.
Pakistan remains the highest-priced destination but has cooled from August’s urgency. Bangladesh remains active but has also softened as first-tier requirements are covered. India is moving in the opposite direction, supported by stronger steel prices, a firmer Rupee, specialist vessel activity and growing international support for its compliant recycling infrastructure. Turkey remains focused on its established regulatory and specialist market.
For shipowners, cash buyers, ship recyclers, shipbrokers and maritime investors, the commercial question remains whether strong recycling demand can overcome the earnings available from continued vessel trading. For now, freight remains the stronger competitor.
For detailed vessel indications, market rankings, steel prices, port positions and ship recycling analysis, access GMS Weekly through the GMS website or mobile app.
Download GMS App
