The global ship recycling market is moving into a more difficult quarter, with rising costs, rising steel prices, possible slowdown in local steel demand, energy shortages and exchange risks. Even within the Indian sub-continent these parameters can have differing impacts. As of today, Bangladesh and Pakistan hold firmer ground in terms of prices offered for recycling candidates, according to leading vessel cash buyer Wirana Shipping’s latest demo market report.

Wirana’s industry report points to a market that is becoming harder to read and harder to time. Steel and scrap indicators are improving across key destinations, but that strength is not flowing evenly into offers to recycling candidates. For shipowners, that means the gap between headline market sentiment and actual executable prices may widen but thanks to slower supply of recycling candidates that ship owners end up getting higher prices than market indications because there will always be some buyers who may decide to speculate to offer higher than current prices.

In India, recyclers are still offering the lowest price levels in the subcontinent even as local steel plate prices, local scrap prices and imported scrap prices have all moved higher. At the same time, energy shortages affecting steel mills have slowed local steel demand and added fresh pressure to sentiment. A partial relaxation of LPG supply to the steel sector may help, but the impact on Alang will depend on how supply conditions develop on the ground this week.

Bangladesh and Pakistan are showing firmer pricing signals. While sentiments of steel mills remain cautious, recyclers in both markets are in a stronger competitive position at present. That is leaving India with scale and capability, but without the pricing strength needed to pull in cleaner candidates in meaningful numbers.

Rakesh Khetan, CEO of Wirana Shipping, said: “The market is not short of recycling capacity, but the supply of recycling candidates continues to remain short. India has compliant yards, infrastructure and depth, but owners are still seeing a clear commercial gap when they compare executable levels across the subcontinent.

“This is where market conditions matter. Energy disruption, foreign exchange pressure and regional instability are feeding directly into demolition values. Ship recyclers have to factor in these costs in addition to the compliance cost.”

Wirana’s report shows that certified recycling capacity across South Asia continues to grow. Bangladesh now has 28 HKC certified facilities, Pakistan has three with more expected shortly, and India has more than 110 yards holding HKC Statements of Compliance.

Mr Khetan said: “The industry has invested heavily in compliance and capacity, but commercial reality also plays a dominant role in decision making process. If pricing in

India does not respond fast enough, majority of the ship owners will continue to look elsewhere, especially now that all the facilities they are looking at are HKC certified facilities.”

The report also points to broader geopolitical pressure feeding into the market. India’s currency has weakened sharply over the past month as the Middle East conflict continues to affect oil dependent economies. Bangladesh remains exposed through imported gas, while Turkey is also dealing with rising cost pressure linked to the same external environment.

At vessel level, supply remains slow to moderate, with medium sized dry bulk, LPG and offshore units circulating this week. Looking ahead, weaker LNG charter rates could bring more candidates into the recycling market, while firm dirty tanker earnings may continue to delay scrapping in the tanker segment.

Mr Khetan said: “This is becoming a more selective market. Sellers need to be realistic, buyers need discipline and both sides need to recognise that volatility is no longer a side issue. It is now central to demolition strategy.”

Wirana expects the coming weeks to be critical in showing whether India can recover pricing momentum, whether post Eid trading in Bangladesh drives stronger activity and whether Pakistan can maintain its recent firmness.

As the second quarter begins, the ship recycling market is offering more optionality on paper, but greater complexity in practice.