The Ship Recycling Process Explained

What is ship recycling?

Ship recycling — sometimes called ship demolition or shipbreaking — is the controlled process of dismantling a vessel at the end of its working life so that its steel, machinery and equipment can be recovered, reused or recycled. A modern, responsibly managed recycling project returns up to 98% of a ship's materials to the economy, making it one of the most circular industries in the world.

Because a large vessel contains thousands of tonnes of steel — as well as hazardous materials that must be handled carefully — ship recycling is both a commercial transaction and a safety-critical, regulated operation. That is why most shipowners work through an experienced ship recycling broker.

Why responsible ship recycling matters

Recycling a ship responsibly protects workers, coastal environments and an owner's reputation. The alternative — beaching a vessel at a non-compliant yard — carries serious safety, environmental and legal risks. Recovered steel also reduces demand for virgin ore, cutting the carbon footprint of new steel production.

The ship recycling process, step by step

Every project is different, but a typical ship recycling process follows these stages:

• 1. Technical assessment & valuation. The vessel's type, flag, Light Displacement Tonnage (LDT), location and condition are reviewed to estimate recycling value.
• 2. Cash buyer & commercial negotiation. A price is agreed, often via a cash buyer who takes title and manages risk between owner and yard.
• 3. Yard selection & compliance check. A certified recycling facility is matched to the vessel, with yard audits and capacity confirmed.
• 4. Documentation & IHM. The Inventory of Hazardous Materials and Ship Recycling Plan are finalised.
• 5. Delivery. The vessel is delivered — As-Is-Where-Is, under its own power or towed — to the recycling yard.
• 6. Dismantling & recovery. The ship is dismantled in a controlled sequence; steel, machinery and equipment are recovered.
• 7. Final recycling certificate. On completion, a Statement/Certificate of Completion of Ship Recycling is issued.

HKC & EU SRR compliance

Two frameworks govern modern ship recycling. The Hong Kong Convention (HKC) sets global standards for safe and environmentally sound recycling, requiring a certified Ship Recycling Facility, an approved Ship Recycling Plan and a verified IHM. The EU Ship Recycling Regulation (EU SRR) requires EU-flagged vessels to be recycled only at yards on the European List of approved facilities.

Navigating both regimes in parallel is one of the most common challenges for owners — and an area where specialist recycling consultancy adds the most value.

What is an IHM?

An Inventory of Hazardous Materials (IHM) is a verified document listing materials on board that require controlled handling — such as asbestos, PCBs and certain paints. A compliant IHM is mandatory before a vessel can be recycled at an HKC- or EU SRR-approved yard, and gaps in IHM documentation are a frequent cause of delays at delivery.

How ship recycling prices are determined

The headline driver of recycling value is Light Displacement Tonnage (LDT) — the weight of the ship's steel — multiplied by the prevailing per-tonne price. That price moves with the global steel market and is further adjusted for:

• Vessel type and steel quality
• Location and delivery terms (e.g. As-Is-Where-Is)
• Bunkers remaining on board
• Volume of reusable machinery and second-hand equipment

How to choose a ship recycling broker

A trustworthy ship recycling broker should offer transparent pricing, verified yard compliance, strong documentation discipline and a track record across vessel types and flags. At DUX, we have brokered the responsible recycling of vessels worldwide since 2013 from our base in Istanbul.

If you have an end-of-life vessel, send us the basics — flag, type, LDT, location and timeline — and you'll receive an indicative offer and recommended pathway within one business day. Talk to a broker.

Frequently asked questions

What is ship recycling?

Ship recycling is the controlled dismantling of an end-of-life vessel so its steel, machinery and equipment can be recovered, reused or recycled — returning up to 98% of a ship's materials to the economy while managing hazardous materials safely.

How is the price of a ship for recycling determined?

Value is driven primarily by LDT multiplied by the prevailing per-tonne price, adjusted for steel market conditions, vessel type, location, bunkers and the amount of reusable equipment.

What is HKC-compliant ship recycling?

It follows the Hong Kong Convention, requiring a certified Ship Recycling Facility, a Ship Recycling Plan and a verified IHM so dismantling is safe for workers and the environment.

What does a ship recycling broker do?

A broker connects owners with suitable yards, negotiates terms, coordinates cash-buyer arrangements, verifies compliance and manages documentation and delivery through to the final recycling certificate.