India's steel and shipping ministries reviewed expanding the use of ship-recycled steel in domestic manufacturing on September 16, even as Alang's ship-breaking volumes have slid to roughly a quarter of capacity.
At a glance
- India's steel and shipping ministries jointly reviewed expanding the use of steel recovered from ship recycling on September 16, 2026, examining the regulatory framework for 'secondary steel' and how to widen its permitted uses, including civil construction.
- The review was chaired by Union Ministers H D Kumaraswamy (Steel and Heavy Industries) and Sarbananda Sonowal (Ports, Shipping and Waterways), with DST, BIS, the Gujarat Maritime Board and the Ship Recycling Industries Association also present.
- Alang, which handles about 97% of India's ship recycling, is operating at roughly a quarter of its 4.5-million-LDT capacity: 113 ships were dismantled in fiscal 2024-25, down from 131 two years earlier and far below the 415-ship peak of 2011-12.
- Recycled ship steel has historically supplied up to 4% of India's total steel production in high-volume years; that contribution has fallen below 1% as ship arrivals have declined, with 2024 marking Alang's lowest calendar-year volume in two decades.
What happened
India's Ministry of Steel and Heavy Industries and Ministry of Ports, Shipping and Waterways held a joint review on September 16, 2026, on how steel recovered from scrapped ships can feed the country's domestic steel manufacturing. Union Steel and Heavy Industries Minister H D Kumaraswamy and Union Ports, Shipping and Waterways Minister Sarbananda Sonowal co-chaired the meeting, joined by officials from the Department of Science and Technology (DST), the Bureau of Indian Standards (BIS), the Gujarat Maritime Board (GMB) and the Ship Recycling Industries Association (SRIA). The agenda: examine the regulatory framework governing so-called secondary steel, the re-rollable plate and structural steel recovered when an old ship is dismantled, and widen the sectors permitted to use it, including civil construction. Officials tied the push to reducing India's reliance on imported steelmaking inputs and to the Make in India and Atmanirbhar Bharat (self-reliant India) programmes, while framing it as protecting India's standing as the world's leading ship-recycling nation. The timing is pointed. Alang, the Gujarat coastal cluster that handles roughly 97% of India's ship-recycling activity and dismantles more than a third of the world's retired cargo and freight tonnage, is running at only about a quarter of its 4.5-million-LDT (light displacement tonnage) capacity. The yard broke up just 113 ships in the fiscal year ended March 2025, versus 131 ships two years earlier and a fraction of the 415 ships it processed at its 2011-12 peak.
The details
The September 16 meeting between India's steel and shipping ministries was, on its face, a modest bureaucratic exercise: a joint review of how 'secondary steel' recovered from scrapped ships gets regulated and where it can legally be used. But the mechanics behind it explain why two Union ministries bothered to sit down together over it. When a ship is broken up at a yard like Alang, most of its hull and structural steel comes off in usable plate and sections rather than as unusable scrap fragments. That plate gets re-rolled into rebar, angles and other construction-grade steel at mills clustered around the recycling yards. Widening the sectors BIS certifies that material for, beyond its traditional home in construction, would open new demand for a steel supply that never has to pass through a blast furnace.
That distinction matters economically. Steel made from scrap in an electric-arc or induction furnace consumes markedly less energy than steel made from iron ore in a blast furnace and basic-oxygen furnace, and it skips the imported metallurgical coking coal that India's ore-based steelmakers depend on. Ship-recycled plate functions, in effect, as a domestic substitute for the steel-melting scrap that Indian mills would otherwise have to source from overseas. A regulatory push to expand where that plate can be used is really a push to substitute a domestic, lower-carbon input for an imported, higher-carbon one, which is also why officials framed the review around Make in India and self-reliance rather than purely around ship-recycling policy.
The review's timing is the part that actually explains the urgency. Alang's throughput has been sliding for years, and not because of anything India's government controls. High global freight earnings have made it more profitable for shipowners to keep ageing vessels sailing than to sell them for scrap, starving Alang of ships to dismantle. Weaker domestic steel prices and a volatile rupee have compounded the problem, making it harder for Indian recyclers to out-bid international buyers for the end-of-life tonnage that does come to market. The result: just 113 ships broken up in the fiscal year through March 2025, against 131 two years prior and 415 at the yard's 2011-12 peak, leaving Alang running at roughly a quarter of its rated capacity. Recycled ship steel's share of India's total steel output has fallen in step, from as much as 4% in strong years to under 1% now.
Gujarat's own response runs in the opposite direction from the current numbers. The state government has committed more than Rs 1,000 crore toward a plan to roughly double Alang's capacity to about 9 million LDT and lift India's share of global ship recycling from around 35% toward nearly 50%, a bet that volumes recover even as this year's figures sit near a two-decade low. A capacity expansion means little without expanded demand for what that capacity produces, which is precisely the gap the September 16 review is aimed at closing on the usage side.
None of this changes anything for steel buyers immediately. No tonnage target, certification deadline or new BIS standard came out of the meeting itself; it was explicitly framed as an examination of the existing framework, not an announcement of a new one. What it signals is a coordinated policy intent, shipping and steel ministries working the same problem from opposite ends, at a moment when Alang's own feedstock is unusually thin. Whether that intent turns into an actual expansion of secondary steel's addressable market depends on decisions, particularly around BIS certification, that are still ahead rather than behind.
Why it matters
Alang is the world's largest single ship-recycling site and the source of nearly all the steel India recovers from scrapped vessels, so shifts in how much it processes and where that steel can be used ripple through both the country's construction-materials supply and its broader push to cut the carbon intensity of steelmaking. A government push to widen recycled ship steel's permitted uses arrives just as the yard's own volumes have fallen to roughly a quarter of capacity, making the policy question less about managing abundance and more about deciding what to do with a shrinking, cheaper, lower-emission steel source while trying to grow it back.
Our read
Outlook: neutral. The September 16 review was explicitly an examination of the existing regulatory framework, with no tonnage target, certification change or timeline announced, so it carries no immediate price signal for steel. The more substantive backdrop, Alang's ship-recycling volumes running at roughly a quarter of capacity and recycled steel's share of national output falling from up to 4% to under 1%, is a structural supply story that predates this meeting and depends on global freight rates and currency conditions the review itself cannot change.
What to watch
- Whether BIS and DST issue revised testing or certification standards for secondary steel following the September 16 review
- Alang's ship arrival and LDT throughput figures in the quarters ahead, against the current roughly 25%-of-capacity run rate
- Global freight rates, a key factor in shipowners' decisions to scrap older vessels rather than keep them in service
- Progress on Gujarat's Rs 1,000-crore-plus plan to expand Alang's capacity toward 9 million LDT
For information only, not investment advice.
Iron price in India
metalscost.com India reference price as of 2026-10-03.
Detailed analysis
Timeline
- 1983-02: The first vessel is beached for dismantling at Alang, Gujarat, marking the start of what becomes the world's largest ship-recycling hub.
- 2011-2012: Alang's ship-recycling volume peaks at 415 vessels dismantled in the fiscal year, its highest on record.
- 2023-03: Alang dismantles 131 ships (about 1.147 million LDT) in the fiscal year ended March 2023.
- 2024-03: Alang dismantles 125 ships (about 944,069 LDT) in the fiscal year ended March 2024.
- 2024: Calendar year 2024 marks Alang's lowest ship-recycling volume in two decades, with only about 20 of its 183 yards operating at one point, according to ship recycler GMS.
- 2025-03: Alang dismantles 113 ships (about 1.006 million LDT) in the fiscal year ended March 2025, leaving the yard at roughly a quarter of its 4.5-million-LDT capacity.
- 2026-09-16: India's Ministry of Steel and Heavy Industries and Ministry of Ports, Shipping and Waterways jointly review expanding the use of secondary steel recovered from ship recycling, with DST, BIS, the Gujarat Maritime Board and the Ship Recycling Industries Association also present.
Demand Drivers
Widening the sectors permitted to use secondary steel from ship recycling, beyond its traditional base in construction, would create new domestic demand for that steel without requiring any new mining or smelting capacity, directly supporting the Make in India and Atmanirbhar Bharat goals officials cited at the September 16 review.
Supply Drivers
Alang dismantled just 113 ships (about 1.006 million LDT) in fiscal 2024-25, down from 131 ships two years earlier and far below the 415-ship 2011-12 peak, leaving the yard at roughly a quarter of its 4.5-million-LDT capacity; 2024 was its lowest calendar-year volume in two decades, with only about 20 of its 183 yards operating at one point.
Government Policies
The joint September 16 review by India's steel and shipping ministries examined the regulatory framework governing secondary steel from ship recycling, with DST and BIS tasked alongside the Gujarat Maritime Board and the Ship Recycling Industries Association with exploring how to expand the sectors, including civil construction, that can legally use it.
Currency Impact
Unstable USD-INR exchange rates have made it harder for Indian ship recyclers to outbid international buyers for end-of-life vessels, a factor cited alongside high freight earnings and weaker domestic steel prices in Alang's recent decline in ship arrivals.
What could lift prices
- A coordinated review by two Union ministries signals genuine policy intent to widen the certified end-uses of secondary steel beyond construction, which would expand demand for Alang's output.
- Gujarat's government has committed over Rs 1,000 crore toward roughly doubling Alang's capacity to about 9 million LDT and lifting India's global ship-recycling share toward nearly 50%.
- Secondary steel's lower energy use and emissions profile align with India's decarbonization goals, giving it a policy tailwind independent of the current supply slump.
What could weigh on prices
- The September 16 meeting produced no binding timeline, certification change or tonnage target; it was explicitly a review of the existing framework rather than a new policy announcement.
- Alang's actual feedstock remains thin, running at roughly a quarter of capacity with 2024 marking a two-decade volume low, so any newly certified demand would have limited domestic supply to draw on in the near term.
- The dominant driver of how many ships reach Alang is the global freight market, not Indian policy; high freight earnings that keep older vessels sailing are entirely outside the review's control.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | High | India recycles the large majority of the world's scrapped commercial ships at Alang, and the steel recovered there is a direct, lower-emission input to the country's domestic steel and construction-materials supply, making both the yard's throughput and the rules governing its steel's end-use directly relevant to India's steelmaking and infrastructure sectors. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Ship Recycling | Positive | A government review aimed at widening the approved uses of secondary steel would expand the addressable market for Alang's output, complementing Gujarat's separate plan to roughly double the yard's capacity. |
| Steel Manufacturing | Positive | Wider certified use of scrap-based secondary steel gives India's electric-arc and induction-furnace mills a domestic, lower-energy input that substitutes for imported steel-melting scrap and ore-based coking coal. |
| Construction | Positive | The review explicitly named civil construction as a sector where recycled ship steel's use could expand, potentially widening access to a cheaper, lower-carbon structural steel source. |
Who gains, who loses
- Alang's ship-recycling yards and steel re-rollers: A wider certified market for secondary steel would expand demand for the re-rollable plate Alang's yards already recover, complementing Gujarat's separate capacity-expansion plan.
- India's electric-arc and induction-furnace steelmakers: Expanded access to ship-recycled steel gives scrap-dependent mills a domestic input that substitutes for imported steel-melting scrap, reducing exposure to overseas scrap prices and shipping costs.
- Primary, ore-based steelmakers: If secondary steel's certified end-uses expand into sectors like construction that primary steelmakers currently serve, blast-furnace producers could face somewhat more competition from cheaper, scrap-based structural steel, though no such shift has been finalized yet.
Other ways this could play out
- If global freight rates soften and shipowners scrap more ageing vessels, Alang's throughput could recover independent of any policy change from the September 16 review.
- If BIS certification is extended to meaningfully new sectors, demand for secondary steel could outpace Alang's currently subdued supply, tightening the market for ship-recycled plate relative to primary steel.
- If the rupee stabilizes and domestic steel prices firm, Indian recyclers may regain competitiveness in bidding for end-of-life ships against international buyers, narrowing the currency-driven part of the current supply gap.
Price risks
- If global freight rates stay elevated, shipowners may keep ageing vessels in service rather than scrap them, keeping Alang's feedstock and India's secondary steel supply constrained regardless of any new usage policy.
- A weaker rupee could continue to make it costlier for Indian recyclers to win bids for end-of-life ships against international buyers, prolonging the current supply shortfall.
Historical comparison
- 2011-12 fiscal year (peak): Alang dismantled 415 ships, its record year; the yard's fiscal 2024-25 total of 113 ships leaves it running at roughly a quarter of its rated 4.5-million-LDT capacity.
- High-volume years vs. today: Recycled ship steel has historically supplied up to 4% of India's total steel production in strong years for Alang; that contribution has fallen below 1% as ship arrivals declined toward a two-decade low in 2024.
Technical view
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Computed from metalscost.com's own stored price history.
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