Wooden-hulled ships were simply set on fire or 'conveniently sunk'. In Tudor times, ships were also dismantled and the timber re-used. This procedure was no longer applicable with the advent of metal-hulled boats.
The navy vessel HMS Temeraire had her masts, stores and guns removed and her crew paid off. She was sold by Dutch auction on 16 August 1838 to John Beatson, a shipbreaker based at Rotherhithe for £5,530. Beatson was then faced with the task of transporting the ship 55 miles from Sheerness to Rotherhithe, the largest ship to have attempted this voyage. To accomplish this he hired two steam tugs from the Thames Steam Towing Company and employed a Rotherhithe pilot named William Scott and twenty five men to sail her up the Thames, at a cost of £58. The shipbreakers undertook a thorough dismantling, removing all the copper sheathing, rudder pintles and gudgeons, copper bolts, nails and other fastenings to be sold back to the Admiralty. The timber was mostly sold to house builders and shipyard owners, though some was retained for working into specialist commemorative furniture. The ship's final voyage was immortalised by William Turner's painting The Fighting ‘Temeraire’, Tugged to her Last Berth to be Broken Up, 1838.
In 1880, Denny Brothers of Dumbarton used scrap maritime steel in their shipbuilding. Many other nations began to purchase British ships for scrap by the late 19th century, including Germany, Italy, the Netherlands and Japan. The Italian industry started in 1892, and the Japanese after an 1896 law had been passed to subsidise native shipbuilding.
After being damaged or involved in a disaster, liner operators did not want the name of the broken ship to tarnish the brand of their passenger services. The final voyage of many Victorian ships was with the final letter of their name chipped off.
The terminations of the First World War and the Second World War both resulted in temporary booms for the ship breaking industry as hundreds of worn-out or obsolete warships were sold for disposal. In the 1930s, it became cheaper to 'beach' a boat and run her ashore as opposed to using a dry dock. The ship would have to weigh as little as possible and run ashore at full speed. Dismantling operations required a 10 feet rise of tide and close proximity to a steel-works. Electric shears, a wrecking ball and oxy-acetylene torches were used. The technique of the time is almost identical to that of developing countries today. Similarly, Thos W Ward Ltd., one of the largest breakers in the United Kingdom in the 1930s, would recondition and sell all furniture and machinery. Many historical artefacts were sold at public auctions: the Cunarder Mauretania received high bids for her fittings worldwide. However, even with obsolete technology, any weapons and military information were carefully removed.
Until the late 20th century, ship breaking took place in port cities of industrialized countries such as the United Kingdom and the United States. Those dismantlers that still remain in the United States work primarily on government surplus vessels. In the mid 20th century, low-cost East Asian countries began to dominate ship breaking, with countries such as Japan, then Korea and Taiwan and then China increasing their world share. For example, in 1977 Taiwan dominated the industry with more than half the market share, followed by Spain and Pakistan. Bangladesh had no capacity at all. However, the sector is volatile and fluctuates wildly, and Taiwan processed just 2 ships 13 years later as wages across East Asia rose.
In 1960, after a severe cyclone, the Greek ship M D Alpine was stranded on the shores of Sitakunda, Chittagong. It could not be re-floated and so remained there for several years. In 1965, the then in East Pakistan, Chittagong Steel House bought the ship and had it scrapped. It took years to scrap the vessel, but the work gave birth to the industry in Bangladesh. Until 1980 the Gadani ship-breaking yard of Pakistan was the largest ship-breaking yard of the world.
Tightening environmental regulations resulted in increased costs of hazardous waste disposal in industrialised countries in the 1980s, causing ships to be exported to lower income nations, chiefly South Asia. This, in turn, created a far worse environmental problem, subsequently leading to the Basel Convention. In 2004 a Basel Convention decision officially classified old ships as “toxic waste”, preventing them from leaving a country without the permission of the importing state. This has led to a resurgence of recycling in environmentally-compliant locations in developed countries, especially in former ship building yards.
On 31 December 2005, the French Navy's Clemenceau left Toulon to be dismantled in Alang, India despite protests over improper disposal capabilities and facilities for the toxic wastes. On 6 January 2006 the Supreme Court of India temporarily denied access to Alang, and the Conseil d'État ordered Clemenceau to return to French waters. Able UK in Hartlepool received a new disassembly contract to use accepted practices in scrapping the ship. The dismantling started on 18 November 2009 and the break-up was completed by the end of 2010, and the event was considered a turning point in the treatment of redundant vessels. Europe and the United States have actually had a resurgence in ship scrapping since the 1990s.
In 2009 the Bangladesh Environmental Lawyers Association won a legal case prohibiting all substandard ship breaking. For 14 months the industry could not import ships and thousands of jobs were lost before the ban was annulled. That same year, the global recession and lower demand for goods led to an increase in the supply of ships for decommissioning. The rate of scrapping is inversely correlated to the freight price, which collapsed in 2009.