Bulker, gas and tanker sectors fuel 65% surge in ship recycling
GLOBAL ship recycling volumes climbed sharply in 2025, rising 65% year on year as shipowners sent a wave of ageing bulkers, shadow fleet* tankers and steam turbine gas carriers for scrap.
According to Lloyd’s List Intelligence data, total ship recycling reached 7.9m gross tonnes in 2025, up from 4.7m gt in 2024. The increase marked the highest level of scrapping activity since 2021, when some 15m gt provided by 671 vessels was recycled amid pandemic-era market disruption.
Despite the sharp rise in tonnage, the total number of vessels scrapped last year actually declined. Data shows that 298 ships were recycled in 2025, down from 322 vessels in 2024 — itself a very quiet year for demolition activity.
The divergence between vessel numbers and total tonnage reflects a clear shift in the profile of ships heading to recycling yards. In 2025, owners disposed of a significantly larger number of large commodity carriers, pushing overall volumes higher even as fewer individual ships were sold for scrap.
Vintage bulk carriers accounted for a substantial share of recycled tonnage, alongside older tankers linked to the shadow fleet and steam turbine-powered gas carriers, many of which face rising operating costs and regulatory pressure.
Tightening environmental rules, weaker earnings prospects for older tonnage and uncertainty over future fuel pathways have all encouraged owners to exit ageing assets.
While recycling levels remain well below 2021 levels, the 2025 figures signal renewed momentum in demolition markets, particularly for large, obsolete vessels whose commercial viability has continued to erode.
The bulk carrier sector provided the largest share of ships sold for scrap in 2025. A total of 72 bulk vessels of a combined 2.5m gt provided some 32% of all tonnage recycled last year.
In particular, small Chinese shipowners rushed to scrap 1990s-built panamaxes, principally engaged in coal trades, and which were due special surveys.
The tanker segment also saw a significant increase in scrap sales, notably for sanctioned 1990s-built and early 2000s-built crude oil and product tankers as some shipowners chose to cash in rather than undertake expensive maintenance.
Scrap sales were dominated by elderly aframax and panamax units with Indian recyclers picking up all of the tonnage previously engaged in shadow fleet trades.
Scrapping of liquefied natural gas carriers meanwhile surged to record highs in 2025, as collapsing freight rates pushed inefficient vessels out of the market.
Lloyd’s List Intelligence data shows that 17 LNG carriers were sold for recycling during the year, all powered by fuel-hungry steam turbine propulsion systems.
With earnings sinking below break-even levels and a growing pool of ageing LNG carriers sitting idle, recycling activity is expected to accelerate further as demand for vintage steam-turbine vessels continues to fade.
The LNG sector’s surge in scrapping stands in sharp contrast to the containership market.
Boxship recycling activity has slumped as owners keep ageing vessels trading during a period of strong charter but volatile freight markets.
Last year just 10 containerships with a combined capacity of 8,000 teu have been sold for recycling, according to Lloyd’s List Intelligence. That puts 2025 on track to be the weakest year for containership scrapping in at least two decades.
With one exception — the 2,400 teu steam turbine-powered Horizon Enterprise (IMO: 7617905) which was sold to Indian recyclers in June — all containerships scrapped last year were below 1,000 teu, underscoring owners’ reluctance to part with larger units.
But after a four-year lull, ship recyclers are poised for a revival. Expectations are for a wave of vintage vessels heading for their scrapyards in 2026.
Anticipating a strong rebound in ship recycling, yards across the Indian subcontinent have upgraded their facilities to align with the Hong Kong Convention, which came into force in June 2025.
A surge in new containership deliveries, the potential large-scale return to Suez Canal routings and accelerating demolition of ageing shadow fleet tankers are all expected to lift recycling volumes over the next 12 months.
Freight markets have remained surprisingly resilient across all sectors despite ongoing geopolitical tensions and war, yet a substantial overhang of obsolete vessels continues to weigh on the fleet.
A full reopening of the Red Sea, combined with a flood of new containership deliveries from the second quarter of 2026, is likely to push large boxships to recycling yards, alongside an increasing number of elderly tankers currently trading in Russian-linked routes.
A peace agreement between Ukraine and Russia would further accelerate this trend, as much of the shadow fleet exits the market.
That said, a meaningful surge in ship recycling will ultimately depend on a sharp downturn in freight markets. Persistently low recycling prices may also still deter owners from sending older vessels to the breakers, at least for now.
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