The replacement of tankers, bulk carriers, and container ships with increasingly new and more fuel-efficient vessels continues unabated. There was a period of decommissioning of a significant number of unprofitable passenger ships. The market is clearly growing – over 7.5% annually – and profitable. Ship recycling markets remain attractive to shipyards in South Asia and Turkey. Despite much talk in the European Union about environmental protection and recycling, European shipowners are sending used ships to scrap yards in other countries.

The European Union has forgotten that ship recycling is also part of the shipbuilding industry. The EU shipbuilding market is reluctant to engage in ship recycling, despite having lost all of its shipbuilding production to Asian shipyards. The situation in the ship scrapping market is influenced by global turmoil, including President Donald Trump’s unpredictable tariff and non-tariff policies and government actions promoting the development of the shipbuilding industry by Asian companies.

The global ship recycling market was valued at approximately $7 billion in 2024 and is projected to reach $13 billion by 2030, at a projected compound annual growth rate (CAGR) of approximately 7.4%, according to BCC Research analysts. Verified Market Reports forecasts that “the market will grow at a CAGR of 8.5% between 2026 and 2033, reaching $12.8 billion by 2033.”

This growth is driven by the increasing number of aging ships being decommissioned and the introduction of ships with environmentally friendly and more fuel-efficient propulsion systems. The growing demand for environmentally friendly recycling practices is also driving changes in the ship recycling market.

Weak Recycling Season
Seasonal factors and regulatory changes continue to have a key impact on the ship recycling market. In India, demand from shipbreaking yards is steadily growing, primarily for medium-sized vessels, according to analysts at Best Oasis, a ship recycling company. These types of vessels are most often brought to the shores of shipyards on the Indian subcontinent. Shipyard crew activity gradually increased as the end of the monsoon season approached. The change in weather conditions coincided with a slow increase in the supply of ships transferred to shipbreaking yards.

In mid-September 2025, the market remained weak for the entire third week, with “no signs of improving sentiment,” according to Best Oasis buyers operating in the market. In their opinion, shipbreaking yard managers “are no longer interested in purchasing ships at any price level and have withdrawn from active negotiations.”

Interest in purchasing decommissioned vessels has also increased in Bangladesh. In this market, demand for old ships was mainly observed at lower prices. This limits the number of transactions, say Best Oasis traders. They believe that “heavy rains continue to slow down the dynamics [of purchases by shipbreaking yards – MG], and expectations for a more pronounced recovery after the monsoon depend on changes in buyer sentiment.”

Signs of Recovery
Signs of recovery are visible in the third week of September. This is due “largely to a lack of available tonnage.” The shortage of vessels in the market has led to buyers competing for decommissioned vessels, offering prices for tonnage at levels that often exceed economic logic.”

In Pakistan, the market is stable, but new guidelines from the ministry regarding Hong Kong Convention (HKC) certification are prompting a reassessment of ship acquisition strategies for scrap yards.

The established rule, which allows only one ship per yard to be certified, is a limitation. In Turkey, activity, prices, and sentiment remain stable and subdued. Without new market drivers, this calm phase is likely to persist for the foreseeable future.

Turkish Market Resilient to Turmoil
The Turkish market appears more resilient to political turmoil and tariff wars. Shipyard activity, contract prices, and sentiment are relatively stable. Best Oasis believes that “this reflects a pattern often observed in this market, where conditions can remain largely unchanged for extended periods.” As can be seen, the Turkish shipbuilding industry is relatively stable and competitive. Both construction and scrapping yards have a strong market position.

Unless there are changes in the surrounding environment, this stable situation will likely persist in Turkey for an extended period. This trend has been observed in recent weeks. Import prices fell in the first half of September of this year, but no further changes were observed in the third week. The earlier decline has still not been reflected in the market; there has been no change in sentiment, demand, or overall activity, note traders at Best Oasis.
In many cases, charter values ​​influence vessel decommissioning. These are dependent on market conditions and the turmoil surrounding tariff wars and further sanctions imposed on ships operating in shadow fleets.

Turkey’s Aliağa shipyard

End of September Good for Recycling
The end of September proved to be a good one for ship scrapping yards. After months of significant volatility in the ship recycling market, a modicum of stability returned to global markets in the third week of September. For recyclers on the Indian subcontinent, sheet metal prices remained stable. “Have they remained optimistically stable?” ask GMS traders.
Currency rates play a significant role in ship scrapping activity. In most markets, the US dollar appeared to weaken against key currencies this week, with the exception of Turkey, which has seen a continued decline in the lira. “Supply also appears to have strengthened somewhat at the bargaining tables, as recycling facilities continue to see tonnage inflows,” say analysts at Global Marketing Systems Inc. (GMS). “Most of the few recent market transactions have been focused on India, while Pakistan and (especially) Bangladesh continue to struggle to secure any consistent offers or significant demand, even for ships that are literally in their backyards or arriving from the Far East,” according to the GMS report.

Turkey’s Aliağa shipyard

Meanwhile, India has dominated virtually all of this year’s recycled LNG sales, which have been sporadic but fortunately stable in recent quarters (and for most of the year), while other categories have clearly remained tied to their trade routes, considering the performance of various indices throughout 2025, according to market analysis by Global Marketing Systems Inc. This type of business is developing in countries with relatively low energy prices and available cheap labor.
The average age of operating ships has gradually increased as the dollar has left the market. Over the past 15 years, scrap prices have remained stable. Ship recycling remains a highly attractive business, with projected supply growth of 7% to 8% annually. Bulk carriers, container ships, and some types of tankers destined for scrap yards left the production yards 30 years ago. During this time, raw material recovery technologies have advanced significantly. The European Union shipbuilding industry still lacks significant activity in this field.

GMS Media Team: India Ratifies the Hong Kong International Convention for Sale and Environmentally Sound Recycling of Ships. 2009

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the proposal for enactment of the “Recycling of Ships Bill, 2019” and accession to the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships, 2009.

The Bill, aptly titled the “Recycling of Ships Bill, 2019”, includes the following salient features:

• -Restrictions / prohibitions against the installation and use of hazardous materials and vessels will be surveyed and certified on the basis of the inventory of hazardous materials (IHM).
• -Ship recycling facilities will need to obtain authorization to operate and only authorized yards will be permitted to import ships for recycling.
• -Ship-specific Ship Recycling Plans (SRPs) will need to be prepared for incoming vessels.
• -Incoming ships will need to obtain a “Ready for Recycling Certificate” in accordance with the HKC.
• -When the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships, 2009 finally comes into force, its provisions will also be implemented under the authorities of the Bill.