Only 273 Ships Sold For Scrap In 9 Months As Record Freight Rates Keep Old Vessels Sailing

Ship recycling fell by 13% in the first nine months of 2026 as shipowners continued to use older vessels instead of selling them for scrap.

Strong freight rates have made it more profitable to keep many of these ships operating, even as the number of ageing vessels in the global fleet continues to rise.

According to Clarksons Research, 273 ships with a combined capacity of 5.5 million gross tons (gt), or around 8 million deadweight tons (dwt), were sold for recycling between January and September. This was 13% lower than a year earlier and about 60% below the average recorded during the 2000s and 2010s.

Less than 0.5% of the global merchant fleet’s tonnage has been scrapped each year for the past five years. The rate is even lower than during the shipping boom of 2006-2008. The industry has not seen such a long period of low recycling activity since the early 1970s.

With fewer ships going for demolition, more older vessels are staying in service.

More than 340 million gt of merchant shipping capacity is now at least 20 years old. This is nearly 90% more than five years ago and accounts for almost 20% of the global fleet, compared with about 12% in 2021.

The amount of tonnage aged 25 years or more has reached over 150 million gt, up about 75% in five years. Another 68 million gt of ships is now more than 30 years old, the highest level on record.

Shipowners have little financial reason to scrap vessels while they can still earn strong returns from operating them.

The ClarkSea Index, which tracks shipping earnings, rose 12% in the week to October 9 to a record $84,951 per day. It was the fifth consecutive time the index had reached an all-time high.

The average for 2026 so far was 70% higher than a year earlier and 87% above the 10-year trend, according to Clarksons Research.

Scrap steel prices at major recycling centres in India, Bangladesh and Pakistan have also risen by 20% to 25% this year. However, the money owners can earn by keeping ships at sea or selling them in the secondhand market has made scrapping a less attractive option.

GMS, a major cash buyer of ships for recycling, said in its latest weekly report that the market had become a test of patience for both shipowners and recyclers.

Recycling yards in South Asia are ready to buy more ships, but owners can continue earning money from their vessels and wait for better opportunities to sell them.

The tanker fleet has seen a sharp increase in the number of older ships. About 22% of tanker capacity is now more than 20 years old, compared with 8% five years ago.

The share of containership capacity aged over 20 years has doubled to 16%, despite a large orderbook for new ships due for delivery in the coming years. The containership orderbook is more than 40% of the existing fleet.

Bulk carriers and liquefied natural gas (LNG) carriers have fewer older vessels. Ships over 20 years old account for about 12% of bulk carrier capacity and 10% of LNG carrier capacity.

Clarksons Research reported that about 8.4 million dwt of ships had been sold for demolition so far in 2026 in its latest recycling market assessment.

Buyers in Bangladesh and Pakistan continue to show interest in commercial vessels, while Indian recycling facilities are focusing more on specialised ships.

Despite higher scrap prices, the overall number of ships being sold for recycling remains low as owners continue to benefit from strong shipping earnings.

References: portnews, shippinginbox