Ship Recycling Market Update Week 15 2026 | War Premium Cracks, Oil Falls, Supply Still Delayed

Week 15 of 2026 marks a potential turning point for the global ship recycling markets, as the long-standing war-driven oil premium begins to ease for the first time in months.

In this episode, Grace and Ryan break down the latest developments across Bangladesh, India, Pakistan, and Turkey, highlighting how falling oil prices, firm freight markets, and stable currencies are shaping recycling sentiment.

The macro environment shifted this week as Brent crude dropped sharply from above USD 109 to near USD 101 per barrel following geopolitical developments involving Iran. However, despite this correction, the Baltic Dry Index climbed above 2,100, indicating that freight earnings remain strong and continue to delay recycling decisions.

Currency markets remained relatively stable, with the U.S. Dollar softening slightly, offering marginal support to sub-continent buyers, while the Indian Rupee weakened modestly after last week’s rebound.

Regionally, Bangladesh continues to lead the market, supported by a sharp increase in steel plate prices to BDT 71,000 and improving Letter of Credit approvals. India remains structurally strong with over 110 HKC-compliant yards but is still constrained by limited supply and ongoing energy challenges. Pakistan stands out for its stability, with firm steel prices and a steady currency supporting consistent bidding. Turkey, despite a slight currency recovery, remains uncompetitive for mainstream tonnage and focused on niche EU-regulated recycling.

A notable transaction this week included an LNG vessel reported at USD 513 per LDT, signaling that deals are still occurring, albeit selectively.

The key theme remains unchanged: recyclers are ready to buy, but vessel supply continues to lag. As oil prices soften and geopolitical uncertainty evolves, the market may be approaching an inflection point, but the timing of any meaningful supply release remains uncertain.

As Q2 progresses and the monsoon window narrows, the industry is watching closely: will lower oil prices trigger increased recycling activity, or will firm freight markets continue to delay the flow of tonnage?

Key Market Developments this week

• War premium in oil begins to ease as Brent drops from USD 109 to ~USD 101
• Baltic Dry Index rises above 2,100, keeping freight earnings strong
• Vessel supply remains constrained despite improving recycling conditions
• Bangladesh leads with strong steel prices and improving LC approvals
• India faces currency pressure and energy constraints despite strong infrastructure
• Pakistan remains stable with firm steel prices and competitive positioning
• Turkey shows slight recovery but remains uncompetitive for mainstream recycling
• LNG vessel sale reported at USD 513/LDT highlights selective deal activity
• Market approaching potential inflection point, but supply response still pending