Ship Breaking: Dry Bulk Scrapping Falls 18-year Low

"Between January and October 2026, dry bulk ship recycling fell 36% y/y to 3m DWT, its lowest level in 18 years. Only 70 ships were recycled, primarily smaller ships in the handysize and supramax segments, as strong freight rates have extended the operational lives of older ships,” says Filipe Gouveia, Shipping Analysis Manager at BIMCO.

Dry bulk ship recycling has been at a low level since 2021 due to strong freight rates. Several disruptions have tightened the supply/demand balance. These include high congestion in 2021, longer sailing distances due to sanctions on Russian coal, which caused ships to be rerouted away from the Red Sea, and growing shipments from the Atlantic to Asia. More recently, strong investment in AI has supported electricity demand, coal consumption and global economic growth, helping the market withstand headwinds from changes in US trade policy and disruptions in the Strait of Hormuz.

“Following several years of low ship recycling levels, a significant overhang has built up. We estimate that if ship lifecycles had remained in line with those observed between 2000 and 2019, an additional 856 ships, totalling 61m DWT, would have been recycled by now. That is equivalent to 6% of the current fleet capacity. As ships remain in service for longer, the dry bulk fleet has gradually aged, with the average bulk carrier now over 13 years old, compared with an average of 10 years at the start of the decade,” says Gouveia.

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