The shipping industry needs to get its priorities straight and focus on modernising the ship recycling segment, which “remains stuck in the past,” warns BRS Shipbrokers in its recently launched annual review
The brokerage has proposed a solution centred on China to address the issue.
“While shipbuilding has become a major industry thanks to plentiful investment and modernisation, the ship recycling industry has not benefited from similar attention, and consequently remains artisanal at best, and primitive at worst,” BRS said.
Ship recycling activity has remained limited in recent years, amid healthy markets and the expansion of the shadow fleet. Last year, approximately 94M dwt of new tonnage was delivered from shipyards, while only about 11M dwt was recycled – a ratio of roughly 9:1.
BRS data indicates that recycling activity continues to be concentrated in the Indian subcontinent, with India, Pakistan, and Bangladesh dominating the market.
“Although progress has been made to improve working conditions through new conventions, ship recycling remains stuck in the past: a source of pollution and, worse, an activity plagued by injuries and fatal accidents,” BRS highlighted.
“At a time when the shipping industry is focused on reducing its environmental footprint, it may have overlooked the issue of ageing ships and how to manage them. Sometimes, as an industry, we get our priorities wrong,” the brokerage added.
China-focused solution
BRS suggests that the industry should take the lead in developing an industrial solution that benefits shipping companies, their customers, and the sector as a whole. China is seen as a key player in this effort.
With a market share of around 75% in shipbuilding and a highly centralised organisation, BRS believes Chinese authorities could promote a solution whereby ships under any flag may be dismantled industrially.
“This could spark investment in dedicated facilities within China,” BRS said.
The brokerage noted that, as of 1 January 2019, China closed its market to recycling foreign-flagged ships. “The decision was logical since China, like many other countries, seeks to reduce domestic pollution and waste-producing industries,” analysts explained.
“However, the pollution generated in India, Pakistan or Bangladesh ends up in our shared atmosphere. So, it is better to control the issue,” it added.
Additionally, China could invest in foreign countries – particularly India, Pakistan, and Bangladesh – where recycling currently thrives, thereby modernising the industry from within.
“Such facilities would host vessels in covered grave docks to limit dust and pollutant release. Cutting robots could be used, and advanced logistics systems implemented to ensure proper recycling of materials, mirroring the standards already seen at modern shipyards,” BRS explained.
The brokerage also emphasised that China, as the world’s largest steel producer, could benefit from recovering scrap steel for its domestic mills.
Shadow fleet on the rise
BRS highlighted the rapidly expanding shadow tanker fleet, which comprises “old and poorly maintained ships that will eventually need to be recycled.”
The brokerage counts 1,047 sanctioned tankers with an average age of 20.2 years, compared with 15.7 years for the full fleet. Most are found in the Aframax, VLCC, MR2, and Suezmax segments.
Riviera’s Tankers 2030 Conference will be held in Singapore, 19-20 November 2026. Use this link for more information and to register for the event.
Events
© 2026 Riviera Maritime Media Ltd.