Ship recycling markets across the Indian subcontinent remain under pressure as declining offers, economic volatility, and geopolitical instability weigh heavily on activity levels. According to cash buyer GMS, the sector has yet to experience the anticipated influx of tonnage in 2025, despite rising global freight rates and market turbulence.
Geopolitical Tensions and Rising Freight Rates Disrupt Supply
While owners were expected to offload vessels for recycling amid global uncertainty, ongoing wars, tariffs, and regional conflicts have instead driven freight rates upward, discouraging shipowners from scrapping vessels. GMS notes that the dry bulk, tanker, and container sectors remain artificially supported due to geopolitical disruptions.
Rise of Dark Fleets and Regulatory Complexities
Another significant challenge for recyclers is the expansion of dark fleets—vessels operating under opaque ownership structures to bypass sanctions and regulations. These fleets, often trading on lucrative yet high-risk routes, are diverting tonnage away from established ship recycling yards, especially in South Asia.
Hong Kong Convention Spurs Facility Upgrades
With the Hong Kong Convention set to enter into force in the next 10 days, there has been movement on compliance. Bangladesh is actively upgrading its recycling yards to match the standards set by India, which has led the region in sustainable ship recycling practices. Meanwhile, Pakistan continues to lag behind in facility improvements.
Turkey Remains Inactive
Meanwhile, Turkey remains largely absent from the bidding market, continuing a trend of low activity observed in recent weeks.
As market conditions remain turbulent, South Asian ship recyclers are navigating a complex environment shaped by global politics, trade sanctions, and regulatory transitions. With the Hong Kong Convention set to reshape compliance expectations, the coming weeks may prove pivotal for regional competitiveness in the ship recycling industry.
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Source: MARINE LINK
