Scrap supply may tighten, especially in western India, as Alang yards remain temporarily shut

• Demolition drive stalls ship cutting activity, scrap dispatches
• Vessel arrivals in Alang increase by 65% y-o-y in Jan-Oct’25

Why have operations at Alang came to a halt?

Operations at the Alang shipbreaking melting scrap market have remained suspended since 15 December after government-led demolition activity in nearby residential zones disrupted labour housing, yard access, and logistics. The action triggered protests by workers and local residents, prompting a temporary shutdown of vessel cutting, scrap processing, and dispatches at the world’s largest ship-recycling hub.

What does it mean for secondary steel supply?

Alang is a critical node in India’s secondary steel value chain, supplying a large volume of melting scrap to induction furnace and rolling material to re-rolling mills in Gujarat, Maharashtra, Rajasthan, and parts of north India. Even short-lived disruptions typically translate into tighter spot availability and delayed deliveries despite currently moderate steel demand.

Price trends before shutdown

According to BigMint assessments, shipbreaking melting scrap prices at Alang were last evaluated at INR 30,600/t ex-yard on 13 December, down INR 200/t d-o-d. The decline reflected subdued buying interest, weak finished steel offtake, and compressed mill margins. Despite the correction, Alang-origin scrap continued to trade at a discount to imported HMS (80:20), preserving its cost advantage for regional IF units.

Supply outlook 

Since 15 December, vessel cutting, grading, and scrap evacuation have remained stalled, limiting trade activity and fresh price discovery. With further demolition activity scheduled and uncertainty over labour resettlement, market participants report increasing difficulty in restoring normal yard operations.

In the wider context, India’s ship recycling sector posted strong growth in January-October 2025, with vessel arrivals rising 65% y-o-y to 1.03 million LDT. Alang scrap prices are expected to stay range-bound if operations resume quickly, though an extended disruption could lend support to prices.