Ship Recycling Trends In India And Bangladesh Shine Amid Global Volatility

The ship recycling markets in India and Bangladesh have shown remarkable resilience and growth, outperforming expectations in the early weeks of 2025. Despite global economic pressures and fluctuating steel prices, India’s market in particular continues to impress, benefiting from robust recycling traffic.

Key Factors Impacting the Market

1. Currency Challenges:
   • The U.S. Dollar’s strength has negatively impacted recycling nation currencies, presenting challenges for the industry.
2. Steel Prices:
   • Global steel prices have weakened, with China leading the decline.
   • India’s steel tariffs may cushion Alang’s ship recycling yards, keeping them competitive.
   • Pakistan faces potential pricing drops, with market levels nearing a downturn.
3. Market Performance:
   • After a low-recycling year in 2024, 2025 is already seeing larger vessels, such as LNG carriers and Panamax bulkers, offered for sale.
   • This is a stark shift from 2024, which saw a decade-low volume of smaller vessels recycled.

Impact of the Hong Kong Convention

The Hong Kong Convention is set to come into effect mid-2025. While many yards are still gearing up to meet its requirements, its enforcement is likely to shape the industry’s trajectory this year:

• Increased compliance costs may reduce the number of yards ready for large-scale operations.
• Market volatility is expected as stakeholders adjust to new regulations.

Outlook for 2025

• Volatility in Prices: Sanctions and regulatory changes will influence the short-term supply of vessels for recycling.
• Opportunities in India and Bangladesh: These markets are poised to leverage current trends and regulatory shifts to strengthen their positions.
• High-Profile Sales: Larger LDT vessels entering the market signal a shift towards more significant transactions, potentially offsetting last year’s muted performance.

As the year unfolds, India and Bangladesh are expected to remain key players in the ship recycling industry, navigating challenges and opportunities alike.