The past week has revealed heightened volatility across global recycling and freight markets, according to GMS’ latest report. Steel prices, currency movements, freight rates, and limited vessel supply all contributed to a complex and unstable market environment. Yet, in the midst of uncertainty, a major regulatory milestone reshaped the regional ship-recycling landscape.
Steel Price Drops and Freight Rate Surge Fuel Market Instability
Throughout the sub-continent and even Chin steel plate prices declined simultaneously, placing pressure on recyclers already navigating fragile fundamentals. Adding to the market’s unpredictability, the U.S. Dollar retreated across all major recycling destinations, except Turkey.
Meanwhile, freight markets continue to surprise. The Baltic Exchange Dry Index climbed another 3.2%, reaching its highest level since December 2023, with nearly every vessel segment contributing to the rally. In contrast, oil prices remain subdued, closing the week at USD 59.16/ton marking a 14% fall over the past year.
Sanctions, blacklists, and attractive freight rates continue to restrict ship-recycling supply. Limited fresh tonnage often low-quality or off-market units has pushed prices downward, particularly for smaller LDT vessels, which are frequently seeing sub-USD 400/ton offers. This has resulted in a dual-priced market dynamic, adding further complexity for buyers and sellers.
Pakistan Achieves Milestone as HKC Compliance Expands Across the Region
Despite ongoing uncertainty, a major breakthrough occurred this week with Pakistan achieving its first Hong Kong Convention (HKC)–compliant yard. Prime Green Recyclers secured Bureau Veritas certification following significant investment and infrastructure upgrades. The accreditation comes at a critical time, as the Hong Kong Convention officially entered into force on June 26.
Pakistan joins a rapidly expanding group of compliant yards across Asia. Bangladesh now boasts 21 HKC-certified facilities, with a 22nd expected soon. India’s Alang leads the region, with over 100 HKC-compliant yards some accredited for more than a decade. This growing compliance momentum marks a transformative shift towards safer, environmentally responsible ship recycling across the sub-continent.
As 2025 nears its end, global ship-recycling markets remain clouded by uncertainty. Weak steel prices, currency volatility, limited vessel supply, and strong freight markets continue to suppress recycling activity. With USD 400/LDT+ still difficult to achieve in many locations, recyclers especially in a resurgent Bangladesh are navigating challenging conditions. Yet regulatory progress, such as Pakistan’s first HKC-compliant yard, signals positive long-term developments. With just weeks left before the new year, the industry continues to hope for a market revival in 2026.
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Source: Safety4Sea
