"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.

The recycling overhang is increasingly visible in the age profile of the fleet. There are now 1,035 dry bulk ships, totalling 46.7m DWT, which are more than 25 years old. These are equivalent to 7% of ships and 4% of fleet capacity. The share of older capacity is highest in the handysize and panamax segments, at 8% each, compared with 5% for supramax. By contrast, only 11 capesize ships are more than 25 years old, since capesizes typically have shorter lifecycles.

In our latest Dry Bulk Shipping Market Overview & Outlook, we forecast the supply/demand balance to gradually weaken in 2027 and 2028, albeit from a high baseline. Ship deliveries are expected to accelerate, growing 19% in 2027 and a further 4% in 2028. The increase will be driven by the capesize segment, following higher contracting in recent years.

“As market conditions gradually weaken, freight rates could soften, making it less attractive to keep older ships operating. Consequently, we estimate ship recycling could increase to 5.5m DWT in 2027 and 9.2m DWT in 2028, which would be the highest since 2020. Nevertheless, even with this increase, recycling levels would be low compared with the highs seen during the 2010s and an overhang of older ships would remain,” says Gouveia.