GMS Week 31 – Pause Breaks, Passage Opens

Weekly Demolition Reports — August 1, 2026

The week began with a ceasefire and ended without one. On Monday, U.S. President Donald Trump announced that the United States had halted strikes at Iran's request, while cautioning that military operations would resume if no new agreement were reached. By Wednesday, Tehran had attacked American assets across the region, and Washington responded with strikes on dozens of Iranian military targets. By Thursday, the two sides were exchanging missile barrages, and Saudi Arabia joined in directly striking Iranian-backed proxies. The ceasefire announced on Monday was effectively abandoned by midweek.

Oil Prices Deflate as Hormuz Traffic Recovers

Despite the escalating conflict, oil prices declined over the week. Brent crude fell from last Friday's USD 97.63 to approximately USD 87, while WTI dropped to USD 83.78, leaving crude down roughly 11% for the week — even after a 6.6% single-session surge during Wednesday's escalation. Prices remain more than 20% higher on a monthly basis.

The decline was driven by renewed traffic through the Strait of Hormuz, through which roughly one-fifth of global oil consumption normally passes. On Wednesday, 14 commodity vessels transited the strait, up from single digits a week earlier. Qatar pushed its first LNG cargo through the passage, and Saudi Arabia convened representatives from 43 countries to discuss the protection of sea lanes.

Meanwhile, further tanker attacks disrupted Black Sea loadings, and the threat in the Bab al-Mandab strait remains unresolved.

Freight Market Volatility

Freight rates fluctuated throughout the week. The Baltic Dry Index — a benchmark for the cost of shipping dry bulk commodities such as iron ore, coal, and grain — slipped to a four-week low of 2,632 on Wednesday before recovering 1.6% to 2,673 on Thursday. The Capesize index rebounded 2.5% to 4,167, while Panamaxes reached 2,040. The Supramax index, which had recently reached four-year highs, eased to a three-week low of 1,610.

For the recycling sector, conditions are quietly constructive. Mid-size earnings continue to cycle, the strait is operational again, and shipowners have a viable physical exit route for tonnage they wish to demolish.

Macroeconomic and Currency Overview

The inflation calendar remained quiet. The U.S. Federal Reserve held interest rates steady, with three dissenting votes. June's economic readings across the South Asian recycling basin remain in effect until the following week's data.

In currency markets, USD/INR strengthened sharply to near 95.65 as crude prices retreated. The Bangladeshi Taka slipped to 123.50, the Turkish Lira set fresh record lows near 47.51, and the Pakistani Rupee held steady near 278.25. Currency movements in these nations directly influence how competitive each recycling destination can bid for end-of-life vessels, as steel scrap is priced locally while vessels are sold in U.S. dollars.

Bangladesh Recycling Resumes

Bangladesh is transitioning from post-flood recovery to active operations. Flooding that killed at least 57 people is subsiding, and the tide window from July 29 to August 1 opened with vessels queued during the flooding now beginning to move. The Port of Chattogram has recorded its first significant beachings since the rains began. Seasonal monsoon disruption to beaching operations is a recurring factor in the subcontinent's recycling calendar, typically peaking between June and September.

The recycling market also saw renewed activity. The chemical tanker Stolt Kikyo was confirmed sold at USD 455 per LDT, ending a month-long period without a reported sale in the basin. Additionally, two facilities in Alang, India, were proposed for inclusion on the EU List of approved ship recycling facilities — a development that could, if approved, open the first direct channel for EU-flagged vessels to be recycled in India. Under the EU Ship Recycling Regulation, EU-flagged commercial vessels may only be dismantled at facilities that have been approved and listed by the European Commission.

Bangladeshi market sentiment strengthened as local steel prices recovered, though the gains have not yet fully translated into vessel pricing. Pakistan's steel plate maintained the subcontinent's top position at approximately PKR 200,000 per ton.

For the first time in a month, the beach, the tide, and the passage through the strait are simultaneously open. The market has not returned to full mobility, but activity has resumed.

For Week 31 of 2026, GMS Market Rankings and vessel indications are available in the full report.

Source: GMS, Inc. | Weekly Demolition Report (PDF)