LNG scrap sales suspended by spot surge

Clarksons estimated a record 1.9M m³ of LNG capacity had been sold for demolition in 2025 to date, more than four times the 10-year average in cubic-metre terms.

Within the broader gas carrier segment, total demolition reached 1.1M dwt on an annualised basis, 122% higher than the previous year.

On the ground, recyclers confirmed LNG units had become a notable, if intermittent, feature of the end-of-life market.

In its Week 46 market insight, vessel cash buyer GMS reported “a steady stream of occasional LNGs” – alongside end-of-life MR tankers and smaller product tankers – had prevented ship recycling markets from “dozing off completely” in the latter part of 2025.

Earlier in the year, Bangladeshi yards’ activity had “essentially banked primarily on large LDT dry bulk and LNG units”, before volumes faded and 2025 was described as “barren” for the country’s recyclers.

At the same time, overall recycling supply remained constrained even as yards invested to comply with the Hong Kong Convention and related frameworks.

Clarksons calculated just 10.4M dwt had been reported sold for demolition across all sectors in 2025 to date, around half the 10-year average annual rate, despite a 34% increase on 2024’s exceptionally low total.

GMS highlighted the pressure this combination of low volumes and lower prices had placed on South Asian facilities, noting Indian HKC-approved yards in particular were facing a “struggle for survival”.

For LNG owners, the data pointed to a market in which a meaningful slice of older capacity had already exited, while tight spot tonnage and firmer earnings made further removals less attractive in the near term.

With recycling economics weakened and regulatory compliance costs rising at the yards, decisions to scrap LNG carriers now looked increasingly binary: either crystallise residual values in a thinner, more regulated demolition market, or continue trading into a freight environment that, at least for now, was rewarding modern two-stroke tonnage handsomely.

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