Alang-Sosiya, located in Gujarat’s Bhavnagar district and home to the world’s largest ship-breaking yard, recorded a marginal increase in ship recycling activity in FY26, even as structural challenges continued to weigh on the sector.
According to industry sources, 119 ships were beached for recycling during FY26, slightly higher than the 113 vessels dismantled in FY25. The total Light Displacement Tonnage (LDT) for FY26 stood at 10,87,447.01 tonnes, compared to 10,06,199 tonnes in the previous year.
A notable feature of FY26 activity was the growing share of sanctioned or “dark fleet” vessels. Of the total ships recycled, 24 were sanctioned vessels, contributing 3,45,021.59 LDT — accounting for 31.72 per cent of the total tonnage.
LDT, which represents the weight of a ship’s hull, machinery, equipment, and spares, serves as the standard metric for valuing vessels sold for scrap.
Diverse Vessel Mix
The vessels dismantled during the year included:
- 46 tankers
- 25 general cargo ships
- 15 bulk carriers
- 9 reefer vessels
- 8 container ships
- 8 LNG vessels
- 2 offshore units
- 2 pipe-laying barges
- One each of tug, LPG carrier, fish factory vessel, and passenger ship
In comparison, Alang handled 125 ships in FY24 (9,44,069 LDT) and 131 ships in FY23 (11,47,480 LDT), indicating a fluctuating but constrained supply trend in recent years.
Freight Boom and Geopolitics Impact Supply
Industry executives attribute the limited availability of recycling candidates to strong global freight markets, which have encouraged shipowners to continue operating ageing vessels rather than sending them for dismantling.
The ongoing conflict in the Middle East, particularly involving Iran, has further tightened supply by making older and sanctioned vessels commercially viable. Elevated freight earnings and oil prices have reinforced this trend, keeping demolition volumes subdued.
A recent market report by Dubai-based Global Marketing Systems (GMS) highlighted that Alang continues to face a shortage of large LDT vessels, with only smaller regional ships — often displaced from conflict-affected trade routes — arriving for recycling. This has left yard utilisation below optimal levels.
Pricing Pressure Weakens India’s Competitive Edge
Despite having over 110 ship recycling yards compliant with the Hong Kong International Convention (HKC) for safe and environmentally sound recycling, India is currently lagging behind regional competitors on pricing.
Industry reports indicate that Alang recyclers are offering the lowest price levels in the Indian subcontinent, even as domestic and imported scrap prices, along with steel plate rates, have risen. Energy shortages affecting steel mills have also dampened local demand, adding pressure to market sentiment.
In contrast, Bangladesh and Pakistan are showing firmer pricing trends, placing them in a stronger competitive position to attract vessels.
Rakesh Khetan, CEO of Wirana Shipping Corporation, noted that while India has robust infrastructure and compliance standards, commercial factors remain decisive. “If pricing in India does not respond quickly, shipowners will continue to favour alternative markets, especially as competing yards are also HKC-compliant,” he said.
Outlook: Selective and Volatile Market
Looking ahead, the ship recycling market is expected to remain selective and volatile. While weaker LNG charter rates could push more vessels toward recycling, strong earnings in the tanker segment may continue to delay scrapping decisions.
Currency fluctuations, energy disruptions, and geopolitical instability are also expected to influence demolition values and market dynamics.
As Khetan observed, “Volatility is no longer a side issue — it is now central to demolition strategy,” underscoring the increasingly complex environment facing both buyers and sellers in the global ship recycling industry.
