- Alang continued facing severe tonnage shortages
- Limited HKC capacity constrained 2026 recovery
Ship recycling activity in the Indian sub-continent stayed weak in the first half of December, with low steel prices, soft currencies, and limited capacity adhereing to Hong Kong Convention (HKC) standards hurting sentiment. Activity was the highest in Bangladesh, while Alang and Gadani continued to struggle for tonnage.
Alang ship-recycling market under pressure
Alang remained the weakest ship-recycling market for the week ending December 16, as green vessels continued to divert toward Bangladesh despite some above-market Indian bids. Limited vessel arrivals highlighted the severe shortage of tonnage, leaving recyclers struggling to secure supply while lower-priced, riskier units remained readily available.
Local fundamentals stayed under heavy pressure, with domestic steel prices falling over $7/t to around $377/t and the rupee weakening sharply to a record INR 90.90/$. This combination eroded buyer confidence, though the ongoing tonnage shortage may eventually help stabilise prices and restore deal viability.
Additionaly, Alang remained closed today due to disruptions from government-led demolition activity, which affected labour housing and nearby villages, prompting residents to seek intervention from authorities.
Chattogram leads sales, but pricing pressure mounts
Chattogram remained the most active recycling hub through November, welcoming multiple green HKC-compliant LNG carriers, a mini cape, and an MR tanker. Despite being the highest-priced destination for over two months, weakening currency conditions and falling steel plate prices forced recyclers to cut offers. Recent vessel sales below market levels dragged regional pricing down, with conventional vessel offers now hovering near or below $400/LDT across the sub-continent.
High freight rates, falling steel plate prices, and political uncertainty ahead of the February 2026 elections have weakened sentiment in Bangladesh. Limited arrivals and weak demand point to a quieter period, reducing its appeal as a recycling destination.
Gadani activity remains muted despite HKC milestone
Despite Prime Green Recyclers becoming Pakistan’s first HKC-ratified yard, Gadani has recorded little fresh business. Limited HKC capacity, DASR-related hurdles, and uncompetitive price levels have kept most proposed vessels away, resulting in largely inactive waterfront conditions. One small LDT unit did arrive, mainly due to relatively weaker alternatives in neighboring markets.
Falling steel plate prices near $575/t, pressured by cheaper Iranian imports, continue to weigh on sentiment despite slightly lower inflation and a stable PKR. Limited HKC compliance may keep Pakistan’s recycling market weak even in 2026.
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