- LukOil Rumored to Face Bankruptcy Amid Market Uncertainty.
- Ship Recycling Prices in India and Pakistan Drop Below USD 400/LDT.
- Bangladesh Holds Slight Edge Despite Falling Steel Demand.
According to the latest report from GMS, November 2025 has seen significant turmoil in the global ship recycling industry. With inflation on the rise, steel prices plummeting, and trading volumes dwindling, key recycling hubs are facing one of the toughest market environments we’ve seen in years, reports Safety4Sea.
Inflation and Steel Price Collapse Deepen Market Instability
As global inflation continues to climb, ship recycling locations are finding it increasingly difficult to manage. In Pakistan, inflation is surging, while Turkey and Bangladesh are only experiencing slight adjustments. India and the U.S. are still waiting for updated figures, but early indicators suggest more economic challenges ahead. On top of that, global steel prices are crashing, putting even more pressure on recyclers as their profit margins shrink.
Freight Indices Show Modest Gains Amid Broader Volatility
In the midst of this global chaos, the Baltic Exchange has reported a nearly 2% increase over the month. Indices for Capesize, Panamax, and smaller segments have risen by 3.1%, 0.9%, and 0.5% respectively, with the overall index gaining 7% this week. However, these improvements stand in stark contrast to the overall slowdown in ship recycling activities, revealing a growing gap between freight earnings and the sentiment in the scrap market.
Geopolitical Tensions and Sanctions Add to Global Disruption
Ongoing sanctions and trade bans are continuing to disrupt international markets, placing additional burdens on legitimate trading operations. Many vessels impacted by these restrictions are unable to be recycled, leading to a mounting backlog. With 2026 on the horizon, industry experts are cautioning that we could face a disastrous turn of events if these conditions persist.
Oil Prices Dip as Supply Surpasses Demand
Global oil prices have taken a hit, dropping nearly 20 basis points to just above USD 60 per barrel. This decline comes as U.S. production ramps up and sanctions on Russian oil giants like Rosneft and Lukoil create uncertainty in the markets. There are reports that LukOil might be on the brink of bankruptcy, while both China and India are grappling with additional challenges from currency fluctuations and trade pressures.
Subcontinent Recycling Markets Fall Below USD 400/LDT
In the ship recycling sector, prices in Pakistan and India have dipped below USD 400/LDT, with Bangladesh only slightly above that mark, all due to weak steel demand. Many vessels that were up for recycling are now being pulled back because the offers just aren’t cutting it.
HKC Upgrades Offer Limited Relief
While a shortage of scrap tonnage has reduced competition, sustainability efforts are making headway; 18 yards in Chattogram have received HKC approval, with three more in the pipeline. Pakistan is still waiting for its first approval, and Turkey is lagging.
Outlook: A Fragile Market as 2026 Approaches
As we look ahead to 2026, the ship recycling industry is feeling the strain of high inflation and declining steel prices, even as there’s been some gradual progress on compliance and upgrades.
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Source: Safety4Sea
