- Global shipping and ship-recycling markets continued to deteriorate as 2025 draws to a close.
- Rising inflation, a strong US dollar, and falling freight and oil prices weighed on market sentiment.
- Ship-recycling prices across the Indian subcontinent have fallen below USD 400/ton.
Global shipping and ship-recycling markets have remained under pressure as 2025 draws to a close, with persistent inflation, weakening demand, and volatile macroeconomic conditions continuing to weigh on sentiment. According to GMS’ latest market assessment, recycling markets and freight fundamentals show little sign of improvement heading into the new year, reports SAFETY4SEA.
Freight and Energy Markets Add to Downward Pressure
Shipping markets weakened further in the final weeks of the year. The Baltic Exchange Dry Index fell nearly 4%, reaching its lowest level in close to a month. Capesize rates led the decline, sliding 5.6%, while Panamax rates dropped 2.1%. Smaller vessel segments also recorded marginal losses.
Energy markets provided little support. Oil futures retreated by more than 3%, settling at USD 57.61 per barrel, failing to reach the widely anticipated USD 60 level. The decline reflected growing concerns over global oversupply, reinforced by forecasts pointing to a record supply glut.
Steel Prices and Currency Movements Weigh on Recycling
Lower oil prices spilled into steel markets, with local steel plate prices falling across major recycling destinations. These declines were compounded by weaker local currencies, as the US dollar strengthened, further eroding recycling pricing in dollar terms.
Together, falling plate prices and adverse currency movements have significantly reduced achievable levels for end-of-life vessels.
Subcontinent Recycling Prices Slide Below USD 400
Ship-recycling markets across the Indian subcontinent were already on a downward trend before recent macroeconomic pressures intensified. Prices that once exceeded USD 600 per ton in early 2024 have steadily declined.
As 2025 draws to a close, recycling prices across India, Bangladesh, and Pakistan have slipped below the USD 400 per ton mark, reflecting weak demand, limited tonnage supply, and cautious buyer sentiment.
Bangladesh Faces Pricing Pressure and Domestic Uncertainty
In Bangladesh, several green vessels were sold at lower levels in recent weeks, while a series of deliveries pushed local prices further down. Domestic uncertainty has also resurfaced following the announcement of final election dates, adding to market volatility.
After briefly attracting the bulk of regional recycling activity, Bangladesh has once again aligned with India and Pakistan in a broader downward pricing trend.
Limited Supply Offers Little Relief
The occasional appearance of recycling candidates has provided only limited support to prices. Overall vessel supply remains thin, offering little relief to a market grappling with weak fundamentals and subdued confidence.
The softer sentiment was visible across all major waterfronts during the week.
HKC Compliance Progress Continues
Despite the challenging environment, progress toward Hong Kong Convention (HKC) compliance continues. In Bangladesh, three additional yards in Chattogram are expected to receive HKC accreditation in the new year.
In Pakistan, the next group of yards is expected to follow within Q1 2026, underscoring continued structural improvements despite market weakness.
Outlook as 2025 Draws to a Close
As 2025 draws to a close, ship-recycling markets remain weighed down by macroeconomic uncertainty, weak freight rates, and declining steel prices. While regulatory progress offers some long-term optimism, near-term conditions suggest the sector may need time to reset before meaningful recovery emerges in 2026.
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Source: SAFETY4SEA
