Indian ship recyclers are increasingly willing to bid at levels that could result in substantial losses at current prices, as competition for a limited number of end-of-life vessels intensifies, according to Wirana Shipping, one of the world's oldest and largest cash buyers of vessels for recycling.

India is one of the world's largest ship recycling markets, with its main breaking cluster at Alang on the country's west coast, competing alongside yards in Bangladesh, Pakistan, and Turkey for end-of-life tonnage. Pricing in these markets is typically driven by the value of recoverable steel, measured in lightweight tonnes (LDT), against local demand for ferrous scrap.

In its latest weekly market report, Wirana Shipping said Indian ship recycling offers have climbed by as much as USD 30/LT LDT over the past three weeks. The increase has been supported by an improving domestic steel market but is increasingly driven by the shortage of vessels available for recycling. Recent bids from high-standard recycling facilities demonstrate how the prolonged lack of tonnage is beginning to distort normal pricing dynamics, Wirana noted.

India's local steel market has continued to strengthen, with steel plate prices rising USD 13/MT during the latest week — the seventh consecutive week of increases. Local scrap prices rose USD 10/MT, imported scrap increased USD 18/MT, and semi-finished and finished steel products climbed by approximately USD 15–25/MT.

However, Wirana said the strength of the underlying steel market alone does not account for the prices currently being offered for some recycling candidates.

Rakesh Khetan, CEO of Wirana Shipping, said: "We are seeing a situation where the scarcity of vessels is becoming as important to pricing as the value of the steel itself. Some high-standard recycling facilities are bidding very aggressively for the limited tonnage available, even when the economics suggest they could make a substantial loss at current steel prices."

He added: "Recycling facilities have invested heavily in infrastructure, safety, environmental standards and their workforce, and they need a reasonable flow of vessels to keep those operations active. When supply remains constrained for a prolonged period, competition for each suitable candidate naturally becomes stronger. The danger is that prices can become disconnected from the underlying recycling economics."

That investment in safety and environmental standards reflects a broader industry shift, as leading South Asian yards — including facilities in India — have pursued compliance with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, which entered into force in June 2025, in order to remain eligible for tonnage from owners with stricter recycling policies. Sustaining such upgraded facilities requires a steady supply of vessels, which adds to competitive pressure when tonnage is scarce.

The latest Wirana Demo Market Report & Market Outlook recorded recycling candidates from the dry and offshore sectors being circulated in India, attracting active interest from recyclers. Across the wider market, however, only a limited number of dry, tanker, and offshore candidates were circulated during the week, with overall recycling supply expected to remain slow to moderate.

The shortage comes as relatively healthy freight and second-hand markets continue to provide owners with alternatives to recycling.

Source: Wirana Shipping Corporation