30 November 2010

GMS weekly report on ship breaking industry for WEEK 47, 2010

With the future of the Bangladeshi market still unclear, it has been left to Pakistan and India to pick up the reigns in recent weeks, something that they have done with aplomb.

Some more high profile vessels and prices were on show once again in India as Pakistan continued their recent resurgence by picking up two more wet units to add to their collection of recent weeks. It is clear that demand and sentiment has once again returned in Pakistan and with steel prices noticeably firm across the board, this is something that will be needed from India/Pakistan, especially if Bangladesh continues to struggle to beach vessels as it has done for the past 6 months.

With no fresh permissions being granted for incoming or waiting vessels, those involved in Chittagong were left with more questions than answers this week. There is certainly hope that further permissions will be granted, perhaps as early as the first tide of December for certain units, but clearly no full market opening is in place.

Indeed, it will be more of a slow and cautious approach for most buyers as 5 more yards are understood to have obtained permissions to beach, on top of the 17 yards that were recently already cleared. So, there remains optimism that more vessels on top of the 14 so far beached will receive clearances, but with the wav the market has been in Chittagong for the past six months, predictability is far from accurate

China ship breaking industry - WEEK 47:

With very few candidates upon which to bid, Chinese buyers were left clutching at thin air for another week of inactivity.
As India and Pakistan continue to pay the big money and vet more uncertainty surrounds the Bangladesh market, China has had to watch from the sidelines as the majority of the market tonnage has eluded them.

It may be a quieter end to the year than many had anticipated for Chinese buyers although smaller general cargo units have been quietly finding their way to local buyers (due to the logistics and expenses to bring them over to India) and it may take a cooling in competing markets before China is once again competitive on price.

India ship breaking industry - WEEK 47:

As Pakistan finally picked up their efforts to be a competitive force once again in the ship recycling arena, India was left with a challenge to take home most of the market units on offer.

Whilst Indian buyers will always be relatively safe in picking up dry units - general cargo, tweens, MPPs, reefers, bulkers and the likes, it is on the wet front that they have started to lose out more (as proved this week with two more market sales to Gadani buyers who need only apply for the gas free for man entry certificate for inward clearance).

Nevertheless, the most significant sale of recent weeks was revealed as Belgian owners sold their Yugoslavian built aframax tanker PROMISE (19,637 LDT) 'as is' Fujairah for an undisclosed figure. The country of build and size ensure she would have received a premium from local buyers, even for an 'as is' deal (she had originally been mooted for an 'as is' UK sale). Having been widely circulated since the summer, she appears to have gone relatively quietly to the cash buyer concerned and is due to arrive India shortly.

The other interesting deal for the week saw Greek owners sell the high spec bulker FEDON (9,425 LDT) for a level usually reserved for tankers at USD 470/LT LDT. The condition of the vessel along with size and country of build contributed to an abnormally high price that may leave one or two surprised (standard bulkers tend to receive USD 450/LT LDT in today's market).

Pakistan ship breaking industry - WEEK 47:

Another busy week for a newly rejuvenated Pakistan market saw a number of market sales register at very firm levels. Two chemical tankers, NIKI and CUSTOM went for levels that even appeared to outstrip those of their Indian counterparts at USD 477/LT LDT as is Fujairah and USD 462/LT LDT respectively.

Less sensitive than Indian buyers on country of build and stainless steel content, these were two impressive purchases and may reflect a renewed aggression in light of the tendency Indian buyers to absorb all tonnage heading their way.

Of course with Pakistan procedures only requiring the gas free for man entry certificate far more wet tonnage has found a home in Gadani of late with the type of levels on offer. It is clear that demand and sentiment especially for the large we units has returned and it is sure to be a busy period ahead for those buyers keen to end the year on a high.

Bangladesh ship breaking industry - WEEK 47:

No beachings for the last tide of November have left many with another uncertain feeling for the immediate future of the Bangladeshi market.
Despite the 14 or so vessels that have so far managed to beach in earlv November, there is no telling whether those will merelybe something of an exception or whether subsequent vessels are able to get the NOCs in place needed in order to beach. There is some hope that the required permissions will soon be forthcoming, but there can be no resting on laurels any more in Bangladesh.

Fresh NOCs have vet to be issued as the Director General of shipping has actually been out of the country so has not vet been able to grant any. It will therefore be an anxious few weeks ahead for concerned cash buyers with vessels waiting and vet more tonnage is arriving.

Source: Steel Guru (sourced from GMS Weekly); Tuesday, 30 Nov 2010

OSHA Reissues Shipbreaking National Emphasis Program, Updates Shipyard PPE Directive

OSHA issued two directives on Nov. 4 to update its National Emphasis Program on Shipbreaking and its Enforcement Guidance for Personal Protective Equipment in Shipyard Employment.

Inspections of shipbreaking operations will focus on 20 worker safety and health issues, including asbestos and lead exposure, polychlorinated biphenlys, confined spaces, heavy metals, powered industrial trucks, guarding of deck edges, oil/fuel removal and tank cleaning, hearing conservation, fire prevention, scaffolds, cutting and welding and personal protective equipment.
The Shipbreaking national emphasis program (NEP) was initiated in 2000 in support of a 1999 agreement between OSHA, the U.S. Navy, the Maritime Administration and EPA. This November 2010 Shipbreaking NEP replaces the update of March 2005.

The revised NEP directive supports the agency’s goal to reduce injuries and illnesses among Latino workers, who comprise a significant part of the shipbreaking work force. Although OSHA standard 29 CFR 1915.73 does not require guarding deck openings and edges in shipbreaking tasks, the revised NEP provides clarification regarding fall protection requirements during shipbreaking operations. This revised NEP is available in a Web-based format with links to shipyard employment safety and health information.

PPE Directive:

OSHA also issued a shipyard employment directive on personal protective equipment that includes employer requirements to pay – that is, provide at no cost to the worker – for certain PPE. Steel-toed rubber boots, goggles, hard hats, hearing protection and respirators are some of the protective items employers must provide free of charge.

This revised Web-based directive also describes equipment that employers do not have to pay for, such as ordinary clothing used as protection from weather, non-specialty prescription safety eyewear and PPE that a worker already owns and is allowed to use instead of the employer-provided PPE.

This revised shipyard PPE guidance also recognizes consensus standards updates in OSHA’s September 2009 final rule, Updating OSHA Standards Based on National Consensus Standards; Personal Protective Equipment. It sets forth enforcement policies that OSHA inspectors should use when citing employers for failing to provide the necessary PPE to their workers.

Source: Article by Laura Walter on EHS Today, Nov 29, 2010
Document Link: OSHA's National Emphasis Program (NEP) on Shipbreaking, 2010

Related Articles:
OSHA Issues Shipbreaking Safety Document; April 9, 2010
Document Link: SafeWork Practices for Shipbreaking; OSHA 2010
Southern Recycling Asks OSHA to Withdraw Shipbreaking Guidance; April 15, 2010
OSHA Initiates Program to Safeguard Shipbreaking Workers; Aug 8, 2001

Norwegian Minister Visits ShipBreaking Yards of Bangladesh

The Norwegian Minister of Environment and International Development, Mr. Erik Solheim, visited Bangladesh on the 22nd and the 23rd of November.

In cooperation with the Ministry of Environment and Forest and the Ministry of Shipping, the Minister visited a ship breaking yard in Chittagong on November 22. The ambassador of Norway in Bangladesh also accompanied him during his visit to Kabir Steel ship breaking yard at Bhatiary of Sitakunda. The aim of this visit was to gain increased understanding of the ship breaking industry.

During his two-day visit the Minister had meetings with the Finance Minister Abul Maal Abdul Muhith, Commerce Minister Muhammad Faruk Khan, Minister of Food and Disaster management Muhammed Abdur Razzaque, Foreign Secretary Mohamed Mijarul Quayes and Ship Breakers Association (BSBA) of Bangladesh. The conversations touched upon several areas of mutual interest like the business opportunities in a changing world, climate change, and ship breaking.

The Royal Norwegian Embassy in Dhaka website, Nov 28, 2010
The Financial Express; Nov 22, 2010
Related news:
Norway keen to help ship recycling industry of Bangladesh;
Monday, October 4th, 2010

GMS update on Bangladesh, India and Pakistanship breaking industry for WEEK 46 of 2010

Bangladesh ship breaking industry - WEEK 46:
Another quiet week in Bangladesh, in terms of NOCs granted and beachings taking place, left many questioning once again, the industry and the optimism surrounding the most recent set of beachings.

Whilst a selection of cash buyers has managed to offload some of their 'as is' tonnage, there is still a significant amount remaining. Additionally, no owners have vet managed to bring vessels in themselves, in the usual delivered manner for beaching.

It remains a delicate situation locally with nobody entirely sure whether fresh permissions will be granted to authorize new clearances or whether those who have already beached must prove themselves capable of fulfilling the 62 conditions before others can attempt to do likewise.

Pakistan ship breaking industry - WEEK 46:
The buying activity continued for the week in Pakistan as 3 more market units found their way to local buyers. Demand post Eid has really seen Pakistani buyers competing far more aggressively with their Indian counterparts and for the first time in some months, the sales board managed to register more than that of their neighbors.

Two PKSC ships have been sold recently, the BOLAN achieved a firm USD 44S/LT LDT and the aframax tanker SWAT received USD 467/LT LDT. The sister ship JOHAR is due to be sold next week with Pakistan now perhaps the most obvious and likely destination.

With levels improving along with steel prices, it should be a busy finish to the year as the aggression to stockyards shows no sign of letting up.

Indian ship breaking industry - WEEK 46:
As Diwali and Eid holidays reached their conclusion, it was back to business as usual for the Indian market, with sentiment remaining healthv in what has been a bullish end to the year so far.

As Pakistan have come back into the picture and Bangladesh have begun to beach a few units (although a full market reopening it most certainly is not), India may not have had it all their own wav of late. However, they still managed to pick up their share of the market tonnage, with two more units scheduled to head their wav from this week.

ODFJELL continued their clear-out of older tonnage as the BOW PANTHER (9,563 LDT) found a buyer for a two month forward delivery at basis January 2011 cancelling. Its destination will be a fully approved green recycling facility in Alang and the vessel fetched a very firm price region USD 4S0/LT LDT, thanks to 70 tonnes of stainless steel in deck and cargo lines, along with the generally excellent condition of their vessels, which ensured the premium price.

Unless some unmediate and positive solution can be found with regards to Bangladesh, it is sure to be a busy end to the year for all concerned with Indian buyers as usual, welcoming all types of vessels and for the time being at least, at strong levels.
Source: Steel Guru; Tuesday, 23 Nov 2010

29 November 2010

Pakistani Ship industry labourers for better working conditions

Balochistan and Karachi-based labour unionists have approached Balochistan Labour Secretary to re-register the Ship Breaking Democratic Workers Union Gaddni (SBDWU), as its registration was cancelled during the recent protest campaign.

Nasir Mansoor, National Trade Union Federation (NTUF) told TheNation that different labour leaders have approached the Labour Secretary Baloch Haider Ali Shikoh to re-register the SBDWU, and he has assured to do so.

Mansoor said that the ship industries’ owners were not willing to restore the registration of the union and in this regard they were also using their influence. He said that the registration of the union was cancelled as the union had recently launched a protest campaign tomorrow, in protest against very poor working conditions, torturous hours, and substandard wages.

The massive protests were sparked as some seventeen workers were reported to have died during the working hour, and their heirs were not provided compensations by the authorities. He said that the labour unions would jointly launch a protest campaign very soon for the rights of the Gaddani ship breaking industry. It is worth-mentioning that earlier, some 15,000 workers of ship breaking site at Gadani (Balochistan) had gone on strike on the call of SBDWU, more than 40 owners of ship breaking sites with demands to raise daily wages, medical cover, adequate occupational safety measure and betterment in severe working conditions.

On the other side, the SBDWU representatives said that around two years back the industries owners negotiated with workers representatives and accepted some demands of the workers but so far they haven’t been in mood to come in term with workers demands.

It is interesting to note that there is boom in ship breaking sector with huge profit since last agreement but workers have not being paid fairly out of this bumper profit.

Workers of ship breaking industry are paid very low (Rs6,000 to Rs7,500 monthly) wages with long working hours stretching from 10 hours to 15 hours and they had to work in very hazardous and dangerous conditions without any precautionary and safety measures besides there was no proper canteen and residence for the ship breaking workers.

There is no properly equipped hospital to cater to the immediate needs of workers in case of emergency and accident at work place; workers are not cover under any health and security nets.

Due to this working environment 17 workers had died during the work within one year with out any compensation from government or ship breaking companies.

Due to all these conditions, there was great panic among workers and they had been forcing the union to start negotiation with employers on their basic demands but employers and managements are least bother about the demand and have not given any wait and serious thought to meet the demand or even start negotiation with workers’ representatives till filling of this report. They requested to postpone the strike for the day, which was rejected by the union leaders with whole heartily consent of the workers.

Source: The Nation, November 20, 2010

23 November 2010

Mare Island ShipRecycling: Federal govt. shouldn't have scrapped open bidding

The $3.1 million federal contract awarded last week for a newly formed company, Allied Defense Recycling to scrap two obsolete World War II-era cargo ships in the Suisun Bay Reserve Fleet seemed perfect in every way, except one.
Allied Defense Recycling of Petaluma has been awarded a federal contract to handle the scrapping of two obsolete cargo ships in Suisun Bay. Photo: Kat Wade / The Chronicle

We say perfect in that it responded to so many North Bay community concerns.

It will remove a source of pollution created by lead-based paint from the derelict vessels flaking into the bay waters.

It will create as many as 120 jobs at the long-closed Mare Island shipyard in Vallejo, where unemployment is exceptionally high. And, while the initial contract is for two ships, there are more ships awaiting disposal. Jay Anast, business operations director for the contractor, Allied Defense Recycling of Petaluma, estimated there is six years of work. Dismantling won't begin until next year however, after ADR dredges the area around the doors to the Mare Island shipyard dry docks. ADR will contract with a local engineers union to do the ship breaking.

It will save the expense of towing the ships through the Panama Canal to ship breakers in Brownsville, Texas. Doing the work in Vallejo also eliminates the cost of making the ships seaworthy, including cleaning the hulls to ensure invasive clams are not spread to other waters - on average, $620,000 per vessel.

But why wasn't the contract put out to bid? Global prices for scrap metal are rising. Scrapping ships is profitable even without subsidy.

The U.S. Maritime Administration, which oversees the disposal of the "ghost fleet," said the justification for "other than full and open competition" is that ADR is the only qualified facility on the West Coast and the Obama administration is moving to dispose of the polluting ships quickly.

ADR is preparing a facility - just as another bidder might have done. The almost perfect outcome is tainted by a whiff of pork.

Source: San Francisco Chronicle; Saturday, November 20, 2010

1 dies at ShipBreaking yard in Chittagong, Bangladesh

One person has died in Shitakunda when a heavy propeller fell on him Sunday afternoon.

Mohammad Belal, 35, died at the Lotus Corporation ship breaking yard, owned by Mohammad Hossain and Mohammad Mohsin, in Madam Bibirhaat, when one of the ship's propeller plates fell on him as he was cutting it.
Belal, son of Mohammad Motaleb of Bhatiari Forest, was taken to the Chittagong Medical College & Hospital (CMCH) where he was declared dead by the duty doctor.

CMCH police camp's, Nayek Pankaj Das, told bdnews24.com that the victim died when an old propeller plate fell on him.

The corporation has promised to compensate Belal's family for his death.

"I am not aware of any such incident having taken place," Mohammad Shahid, sub-inspector, Shitakunda police station, told bdnews24.com.

Source: bdnews24.com; Sunday Nov 21st http://www.bdnews24.com/details.php?id=179427&cid=2

IRON CROWS : IDFA Movie Review

A ship’s death is worth a man’s life.........................

‘I’m not scared, I could die today, tomorrow, or a day later’ a ship dismantler said in the movie Iron Crows. This mind-grasping documentary takes you into the lives of ship breakers who belong to the Bangladesh’s poorest of the poor.

In the seaport city of Chittagong, Bangladesh, you can find the world’s largest ship demolition yards, which dispose more than half of the world’s ships. For the movie Iron Crows, Korean director Bong-Nam Park went to a yard called PHP that supposedly had the best working conditions. However, if you watch the 59 minute long movie you will be shocked. The movie depicts a scene where the 21-year-old Bilal barely escapes death. The danger the workers expose themselves to will have you sitting on the edge of your seat and is nothing compared to National Geographic’s ‘World’s toughest jobs.’

The workers, who range from age twelve to older than 60, acknowledge the jeopardy they engage themselves in. Yet, they are desperate for a pay of merely two dollars a day to provide for their families. One worker states ‘Here we live and die. Do you understand? This is all we have.’ The PHP port is a long dirty shore where huge ships are docked. Hundreds of men dismantle ships with blowtorches at once while only a few of them wear helmets. The most unimaginable thing of all is that hardly any of them wear shoes.

The visuals of the movie are breathtaking. The demolishment of the ship is almost surreal for the viewer as it entails life or death. It is the environment in general though in which these workers live in that is touching. Working and living at the port is given a double view by director Bong-Nam Park. On one hand the HP port has a dark and un-earth like atmosphere but on the other hand the ship graveyard is not the focus, but the unfortunate stories of the men are.

Most of the workers come from villages far from Chittagong to earn money. The 21-year-old Bilal, was followed to his village to go see his new born daughter who was born blind. The trip home took four days. Sometimes during Iron Crows you wondered where these men got their energy from if they demolished ships day in and out. It was disturbing to see how both Bilal’s lives, at PHP and in the village, were so wretched.

The irony of the movie is that a ship’s death is a worker’s life. Iron Crows will take you into a mesmerizing dynamic of Chittagong’s poverty. Although you will feel pity at times, Bong-Nam Park wants the viewer to see the beauty of the irony.

In 2009 Iron Crows won the Award for the best Mid-length documentary, 2009, IDFA (International Documentary Film Festival Amsterdam).

Source: http://lis01.wordpress.com/2010/11/20/review-idfa-movie-iron-crows/

20 November 2010

Signs of Reopening of Bangladesh ShipBreaking Yards after 6 months

The major news from the week saw several beachings taking place - something that has been six months in the making (except for the beaching of two exceptions about a month ago). A limited number of vessels were granted NOCs (No Objection Certificates) this week, by the Director General of Shipping Department in Bangladesh. Based on the reported number of vessels at anchorage, the market should expect to see at least 14 vessels hitting the beaches of Chittagong, during the upcoming beaching tide.

17 yards load been inspected and approved by the Bangladesh environmental ministry last month and with the progress made so far this week the industry appears to be moving closer to reopening after having been out of action for the last 6 months.

Of the 17 yards that have obtained permission to beach, the majority of those have bought cash buyer 'as is' tonnage and there is still a significant quantity of that to go. Moreover, only a few of those 17 yards have opted against committing to new vessels, in order to see how the beachings proceed against the fierce protest of BELA amongst others.

It is worth stressing that less than 20% (17/105 yards) have received permissions and so a full reopening of the Bangladeshi market is far from complete. In fact, there is a feeling that no fresh/future permissions will be granted until those yards that have managed to beach units, can prove that they can satisfy the 62 conditions that have been set in front of them. If a few more deals are to be done, relevant NOCs granted and inward clearance permission obtained, it is still worth being cautiously optimistic on both price and the realities of a tougher and far more complex and arduous arrivals / clearance procedure.

Of course, there will be no resting easy until the physical beaching of these 14 vessels takes place, but the signs at this stage are promising. There is some suggestion locally that no more NOCs will be issued for the time being, so if a reopening is to occur off the back of this week's activity, it will be a case of slowly but surely.

Source: SteelGuru; Tuesday, 16 Nov 2010

Alang ShipBreaking yard in India soon to compete with China, US, Europe

While so far it may have been competing with neighbouring countries like Pakistan and Bangladesh, India's very own ship recycling yard based out of Alang in Gujarat will now compete with major yards in the US, European countries and China, thanks to the Gujarat government 'Green Alang' initiative.

As part of the initiative, eco-friendly infrastructure is being developed in the region, apart from best practices and healthcare issues being taken care of for the welfare of the workers. "Ship recycling, at times, involves some hazardous operations which the green initiative intends to minimise. Water treatment plant, insulators, fixed working hours and waste handling facilities are some of the things being developed at Alang. Such eco-friendly practices are a must if we need to cater to several major international clients who demand strict norms to be followed by any ship recycling yard. As of now, only the likes of the US, Europe and China are able to provide such a quality," said Nikhil Gupta, joint secretary of Ship Recycling Industries Association (India) at Alang.

The yard at Alang, which enjoys a share of 50-60 per cent of the total ships recycled in the world, offers a lucrative price of $425 per tonne for steel. Yet, major clients including Maersk opts for China for ship recycling in spite of the country offering $325 per tonne. "We offer attractive prices for recycled steel yet companies like Maersk opt for China because of the recycling quality. With the green development around Alang, soon this will change as we will also be able to provide international quality that will match the likes of China, the US and Europe," said Gupta.

To begin with, Alang will soon provide gas-free certification for in-bound ships, something that other major ship recycling yards have been providing. "Gas-free certification requires approval of a ship for recycling wherein the oil-sludge on a ship is removed. In India all in-bound ships are currently cleaned for gas-free certification in Dubai which costs around $10-15 per tonne for ship owners. Ship owners will be able to save that cost once Alang begins to provide such a facility too soon," Gupta added.

Add to that, the Gujarat Maritime Board is also setting up training sites for skill development of workers in the ship recycling industry at Alang. Also, while GMB will provide land and infrastructure, ship breakers will develop housing colonies for workers.

Meanwhile, the ship recycling industry is bustling with activity. As against 70 plots in 2008-09, there are currently 170-odd ship recycling plots at Alang wherein three million tonnes of steel is recycled every year. At Rs 25 per kg, the industry pegs a turnover of Rs 7,500 crore at Alang.

Source: Vinay Umarji / Mumbai/ Ahmedabad November 19, 2010, 0:18 IST

Hartlepool (Able UK) 'Ghost Ship' yard in £10m investment plan

A company, Able UK which is scrapping a former French warship is hoping to invest £10m to secure the future of its shipyard when the contract comes to an end. Able UK is currently dismantling the Clemenceau aircraft carrier at its Seaton Port site near Hartepool.

 The Clemenceau

The controversial dismantling of the so-called "ghost ship" is due to end next month and the company is planning to build dry dock gates at the site. It is hoping the move will secure the yard's future and create new jobs.

The Clemenceau arrived in the region in February 2009 and the work was due to take a year, but has overrun by about 10 months. The vessel was once regarded as the pride of the French navy weighing 30,000 tonnes. In June 2008 Able UK made a successful bid for the contract to dismantle the ship.

'Rabbit warren'
This sparked protests from environmentalists concerned about the hundreds of tonnes of asbestos on board.But after a High Court appeal the company won the right to carry out the work.

The company's group development manager, Neil Etherington, said: "The work took longer than anticipated - the ship was a bit of a rabbit warren and it was a complex operation.

"But we have proved we can do it and we are looking to go onwards and upwards. We are reviewing our plans for future development - clearly, with one of the largest dry dock facilities in the world, the site has significant potential for a wide range of uses including decommissioning of ships and oil and gas platforms.

"We are undertaking a study into the potential construction of new dry dock gates. This would provide increased flexibility and open up new market opportunities."

Related stories:
Source: BBC News; TEES; 16 Nov 2010

Ship Recycling - Marad & Mare Island: Miracle or Mirage?

The West Coast, domestic ship disposal solution that Marad, California and environmental activists have been waiting for might be just around the corner. With the hard part seemingly over, it remains to be seen whether Marad’s chosen contractor can deliver.

This month’s U.S. DOT announcement of contracts awarded to Allied Defense Recycling (ADR) to clean and recycle two Reserve Fleet ships seemingly heralds the break that U.S. Maritime Administration officials have long pined for on the U.S. West Coast. According to the November press release, two ships are scheduled to be towed from Suisun Bay to the former Mare Island Naval Shipyard facility for recycling in December. Local politicians praise the awards as the ideal solution to the problem of environmentally-correct disposal of the old, decaying hulls. Beyond this, the costly removal of marine growth from the hulls and subsequent towing of the vessels through the Panama Canal to Texas will also be obviated. As of Wednesday morning, only a few pieces of the puzzle remained to be solved.


Ghost Ships: Marad’s Nightmare

The aging, mothballed fleet of so-called “Ghost Ships” has been a thorn in Marad’s side for many years, with the matter coming to a particularly hot boil during the tenure of Sean Connaughton as Marad Chief. During that time, numerous vessels were disposed of from both the Hampton Roads and Beaumont fleets, but the state of California [and a Coast Guard policy that addressed invasive species adhered to the vessel’s hulls] stymied any Marad efforts to move the ships from Suisun Bay, once and for all. The local policy of not allowing the vessels to be moved until the “toxic” paint had been removed left Marad with few, if any options, on the West Coast.

Marad, over the years, has taken a lot of heat for what they haven’t done with regard to the three Ghost Ship fleets. Leaving aside, for a moment, the headaches of trying to get anything accomplished in a state like California, the Maritime Administration has actually moved more than 130 ships out of its National Defense Reserve Fleet sites since 2001. Marad is also on record as stating that California’s obstructionist policy left the Golden State on the sidelines for a prolonged period of time as vessels from Texas and Virginia were rapidly sent out to recycling destinations. Don’t forget that California is also the place where they hope to enforce an invasive species standard for active vessels trading with ballast that cannot be measured using existing technology. That the newest proposed solution has gotten this far is therefore a remarkable accomplishment in and of itself.

More recently, a dozen ships had been scrubbed of invasive species at another local shipyard – at the reported whopping cost of $500,000 to $900,000 per hull – prior to being towed to Texas, more than 5,000 miles distant. The Mare Island solution, just 10 miles from the Suisun Bay fleet, not only provides local work for California labor, but also eliminates the costly step of scamping the hulls for invasive species. You have to wonder why no one has thought of it before. Actually, they have. And for that reason alone, it is worth taking a step back before breaking open the champagne.

The Mare Island Concept Takes Shape:

According to MarPro sources, Marad pre-qualified ADR as far back as 2005, but a protest made to the GAO quashed the whole thing. Then, in July of 2008, the Basel Action Network (BAN), an organization focused on ‘confronting the global environmental injustice and economic inefficiency of toxic trade,’ reported on the possibility that the Mare Island site would come to fruition. Actually, the idea is a lot older than that.

Contrary to public reports that suggest that ADR is the only qualified company that has coveted the Mare Island site, at least one other experienced recycler has, in the past, dipped their toes in the water here. Nevertheless, and fast forward (more than two years later) to October of 2010: Marad issued a notice of “Justification and Approval” for other than full and open competition under the commercial item test program. In general terms, the notice solicits Allied Defense Recycling to recycle and dispose of two vessels now situated in the Suisun Bay NRDF. According to the document, “A competitive announcement, with the time to obtain a quote for cleaning, evaluation, selection and award, would jeopardize the opening of the ADR facility….Under its dredging permit, ADR must complete the dredging by December 31, 2010.” The disclosure also admits, “…failure to meet the dredging date could result in the demise of the Bay area recycling facility before it opens.” No kidding.

The dollar value of the contract for the disposal services, for reasons unknown, was redacted. Today, and in order for the facility to open as planned, dredging – which reportedly has not commenced – needs to be completed, in addition to a number of other preparatory tasks. And yet, on November 9th, Marad issued a press release (MARAD 19-10) announcing the award of a $3.1 Million Contract to a so far untested “Bay Area Ship Recycler.”

“This is further evidence of our commitment to clean up Suisun Bay,” said Maritime Administrator David Matsuda. “The Mare Island recycling facility will bolster our efforts to remove obsolete ships and reduce environmental risks to the Bay.” Also according to Marad, “Allied Defense Recycling, using the former Mare Island Naval Shipyard, will recycle the ships avoiding the lengthy tow to ship recyclers in other areas.” Or, so one would hope.


SITREP: November 2010

On Tuesday, Marad spokeswoman Cheron Wicker confirmed that ADR was indeed working under a December 31st deadline to get the dredging complete. Separately, and also on Tuesday, ADR Managing Director Jay Anast was reached for comment. He told MarPro, “The dredging approvals are in place and we are waiting for the dredging equipment – which is enroute – to arrive on site.” He added that the process was on schedule, and barring any unforeseen problems or delays, the dredging would be complete by the end of the year. Following that, he expected to take delivery of the first vessel by the end of January.

Speaking to MarPro from overseas, Anast remained confident that ADR could accomplish the required tasks at the Mare Island shipyard by the 31 December deadline. He added, “Getting all of the approvals and permitting was the biggest challenge. We believe that the hard part is behind us.” He characterized the near unanimous local support from the various planning commissions and boards as “especially gratifying.” He put the cost of starting up the new, Mare Island ship disposal service at more than $6 million.

Critics of the ADR plan at Mare Island cite Marad’s secretive approval for “other than full and open competition” and pointed to the unproven track record of ADR in the ship disposal business. But Anast answered those concerns by insisting, “This is a startup company, but the principals have deep ship recycling experience – as many as 30 hulls in the past – and similar qualifications in hazardous material remediation.” Anast went on to point out the reduced carbon footprint of the local ADR plan which would eliminate the need to burn 500,000 gallons of fuel to get the hulls to Texas. U.S. taxpayers, he said, would receive relief of up to $3 million reduction in the cost of disposing of each hull.

It all sounds good. And, from the ADR side of the ledger, it gets even better. Assuming they can competently scrap the first two hulls, the startup firm would presumably then be the sole-source provider on the West Coast and be in position to take on the remaining 45 hulls still in the fleet. ADR Managing Director Jay Anast says that the hard part is behind him, but it is clear (at least to this writer) that the nascent project is not yet out of the woods. That said, he has gotten this far in what is widely regarded as perhaps the most onerous regulatory and political environment known to man.

I honestly have no idea whether ADR’s Mare Island facility will come up to speed and eventually serve as the environmentally-friendly, job-creating, West Coast ship disposal machine that Marad, California and ADR hope that it will be. It would, at the end of the day, be nice to see those ships begin to disappear in a more regular fashion from Suisun Bay. And, the clock is ticking. It remains to be whether this latest effort represents the “Miracle at Mare Island” or perhaps, “Marad’s Mirage.” Stay tuned. – MR

Joseph Keefe is the lead commentator of MaritimeProfessional.com. You can also read his work in MarineNews and The Maritime Reporter magazines. He can be reached at jkeefe@maritimeprofessional.com or at Keefe@marinelink.com. MaritimeProfessional.com is the largest business networking site devoted to the marine industry. Each day thousands of industry professionals around the world log on to network, connect, and communicate.

Source: Global Maritime Analysis with Joseph Keefe. Nov 17, 2010

15 November 2010

Wind of Change in Asian Shipbreaking Countries

Ship dismantling is no new phenomenon. It is accepted as best option for disposal at the end of productive life of a ship. Dismantling of ships has been highly lucrative for some countries, as almost all of the metal used to build a vessel can be reused.

Currently India, Bangladesh, China, Turkey and Pakistan are the top five shipbreaking countries. Developed countries have found it difficult to maintain ship-dismantling facilities due to high labour cost and expenses associated with proper health, safety and environmental procedures. In countries like India, Bangladesh and Pakistan control over workers rights and environmental issues is not yet very prominent, allowing shipbreaking companies to pay workers little and make increased profits. Media interest on the dangers faced by workers in these countries has increased greatly over recent years, which led the IMO to implement changes to the shipping industry that would benefit the workers of ship-dismantling yards. IMO recognised ship-dismantling as an important recycling industry, as since most of a ship’s materials can be reused or recycled. Therefore they needed to focus on the current dangers and make the thought of becoming a more environmentally friendly ship recycling yard, more appealing to the owners of the yards and ships. One of the most influential moves involved in this was the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships 2009. The main aim of this was to decrease the dangers of ship-dismantling.

A key aspect of this convention is the Inventory of Hazardous Materials (IHM), which all ships will be required to possess once the convention comes into force. For a long time ships had been built containing hazardous materials, such as Asbestos, PCBS, and TBTs. As the dangers of these had come to light, they were no longer used in construction. However many ships still in use will contain the hazards, which if disturbed could become deadly. The inventory will be required for all commercial ships from their birth, and will have to be maintained throughout the ships life as it gains new additions that may contain hazards. In future recycling yards will not allow any ships to come into the yards unless it contains an up-to-date inventory. The safe removal of hazardous materials from ships would greatly reduce the exposure to dismantling workers at yards.

Beside IMO, organizations like ILO, UNEP, World Bank, EU, ISO, major shipping industries and their associations, and the governments of shipbreaking countries are putting sincere efforts to improve the working and environmental condition in the shipbreaking yards, especially in the South Asian countries.

Shipbreaking industry in Asia is now going through a transition phase. Associated governments have taken the issue seriously and together with industry stakeholders, have started to move towards the right direction, towards transforming the deadly ship-breaking yards to safe and green ship-recycling yards.

14 November 2010

Bangladesh concedes shipbreaking crown to India:

The wait for necessary paperwork and approvals continues to frustrate Bangladesh’s ship recycling industry.

THE biggest change for the ship demolition sector this year has been the changing picture of where owners can sell their ageing ships, after buying activity from the largest shipbreaking nation froze. Uncertainty still surrounds the Bangladeshi ship demolition sector 10 months on from the country’s Supreme Court banning breaking yards from importing vessels that had not been pre-cleaned of toxic materials.

Between 17-25 facilities of the 63 shipbreaking yards thought to be operational in Bangladesh’s ship recycling hub of Chittagong have been granted approval in the past month to buy vessels. Around 20 ships have since been beached after passing the requirements of 4 governmental departments. But still none have yet started the cutting process as more paperwork and approvals are necessary.

It was predicted in October that 60% of the migrant workers who cut vessels in Bangladesh’s shipbreaking yards had lost their jobs, estimated at around 16,000-17,000 people, as there was no steel left to cut.

Ship demolition brokers say owners are still asking about Bangladesh — historically the country offers the highest scrap price per ldt. However, the uncertainty and controversy surrounding the Chittagong industry has meant many are dissuading their clients from pursuing the country as a recycling destination and instead are promoting rival breakers in neighbouring India and Pakistan. This shift in the demolition market has allowed Pakistan, which had been overshadowed by its neighbours for years, to show how well it can perform once aggressive Bangladesh scrap prices are taken out of the equation.

So far this year, breakers in Gadani have bought 101 ships, totaling 835,730 ldt, according to Greek broker N Cotzias Shipping. This includes 41 dry cargo vessels, which is down on the 69 Pakistani breakers bought in 2009. But the big change is that Pakistan has absorbed the wet tonnage — tankers and gas carriers — that Bangladesh would have traditionally bought up.

The number of wet cargoships purchased by Gadani breakers has more than tripled, with 57 vessels sold to Pakistan this year, compared with just 17 last year.

In comparison, by the end of November Bangladesh had imported less than half of the total tonnage it bought for recycling in 2009. N Cotzias reports Chittagong breakers have purchased 102 vessels this year, totaling 1.2m ldt, compared with 208 ships of 2.3m ldt last year.

Even India, which traditionally specialises in dry cargoships such as bulk carriers and containerships, has increased the volume of wet tonnage it has imported. Of the total 431 ships of 3.1m ldt India has bought this year, the country has taken in 132 wet cargo vessels of nearly 1.1m ldt. This is up from just 55 of 526,463 ldt in 2009, the N Cotzias data shows.

Whether Bangladesh will retain its title as the destination of choice for tanker tonnage in 2011 is still out for debate, but with its rivals getting their foot in the door this year it could prove a lot harder to compete for ships in the future.

Source: Lloydslist. Tuesday, 14 November 2010

Ship demolition could rescue struggling owners:

Not enough tonnage is being scrapped to counteract the vast number of newbuildings entering service. BALANCE can be said to describe a situation in which different elements are equal or in the correct proportions. Unfortunately for shipowners, this sort of equilibrium is not apparent in the maritime industry right now. Record newbuilding deliveries over the past two years have seen the global fleet grow at an alarming rate, leaving competition for cargoes as fierce as ever and dragging down freight rates.

And after months of this situation repeating itself, the strain of weak chartering markets is starting to take its toll on owners’ bank balances. However, a mechanism for reducing the effects of a growing fleet has been in place the whole time. Ship demolition has been hailed as the saviour of the shipping markets over the last two years by analysts, owners and bankers, but although they have all talked about it, not enough tonnage has been scrapped to counteract the vast number of newbuildings entering service. At the start of 2009 it was predicted that more than 1,000 ships would be scrapped and that came true. Then towards the end of last year, as models of fleet growth were drawn up, demolition experts forecast that even weaker chartering conditions would prompt owners to dispose of around 2,000 vessels in 2010.

Unfortunately this was not the case.

Data from Greek shipbroker N Cotzias shows that by the end of November, 1,141 ships had been sold for demolition, totaling 27.7m dwt. This is shy of the 1,240 ships that it reported were scrapped in the whole of 2009. By comparison, rival broker Clarksons reports that 2,566 ships of 134m dwt have been delivered from shipyards globally in the year-to-date. That represents almost eight ships per day.

In terms of volume, this is up from the 117m dwt delivered in 2009 and 67m dwt in 2008. N Cotzias said in its latest report that the record number of deliveries this year was “a seriously alarming problem”, which it felt “has not been faced with the amount of seriousness and adequate severity” it needed.

The Greek shipbroker made particular reference to the vast dry bulk orderbook that in 2011 alone has 1,851 ships or 129m tonnes set to hit the water, to which a huge number of slipped deliveries from this year will also be added. It said the record numbers seen this year had already “somewhat dampened the overall positive effects of China’s growing demand”. This had kept the chartering market at “semi-mediocre” levels and if the 70m dwt of capacity that was delivered this year had not been, freight rates would have been around 20%-30% higher, it forecast.

“Cancellations and scrapping are the only effective measures we may use against the overcapacity issues, but unless these ships [that are] cancelled or scrapped are tripled in volume, the problem will occur and we will just feel that up to now we would have swept the dust under the carpet,” the report said. Monthly figures from the Greek shipbroker show that the first six months of this year saw 725 vessels sold for demolition — almost 75% more than the 416 ships scrapped between July and November.

In contrast, London broker Clarksons’ Clarksea Index, a combination of dry bulk, tanker and container freight rates, has averaged $13,919 per day in the second half of the year so far, down from $16,487 per day in the first half. But despite this the chartering markets do appear to have had an impact on certain shipping sectors and the volume of tonnage sold for demolition.

The N Cotzias data shows 160 ships of 2.9m dwt from the containership, tweendecker and multipurpose fleet have been sold for recycling so far this year, representing just a third of the 387 vessels totalling 9.2m dwt that were demolished in 2009. This coincides with a revival in the boxship chartering market that saw the Hamburg Shipbroker’s Associations’ Contex Index recover to 600 points in September, compared with record low levels in the mid-250 range at the start of the year. But demolition sales lost from this sector have been replaced by tonnage from the tanker and gas markets, after a year of struggling to find employment for older vessels and the looming deadline of the International Maritime Organization’s phase-out of single-hulled tankers at the end of this year.

The number of ships from the tanker and gas sector sold for demolition has reached 329 vessels so far this year, totalling 15.6m dwt and representing nearly 30% of total scrap sales, the N Cotzias data shows. This is up from the 198 ships of 9.8m dwt sold in 2009, which represented 16% of last year’s demolition deals. And for shipowners who have decided to sell-off ageing tankers this year, they have received more cash for their steel compared with last year.

Although only representing a third of demolition deals this year, breakers have paid over $1bn for wet tonnage in 2010, representing half of the total $2bn paid out so far in 2010. By comparison, breaks paid out $446m for tankers and gas carriers last year, of a total $1.8bn for all demolition sales. But one area where less cash is being spent by breakers is the dry bulk sector. Despite bulk carriers retaining a consistent proportion of scrap sales at around 30% of the market, just $390m has been paid out for these vessels this year, compared with $528m last year.

N Cotzias counts 357 bulkers of 7.3m dwt recycled this year, down from 414 of 12.8m in 2009. This will not come as good news for owners of capesizes and very large ore carriers that the Greek shipbroker names as having the hardest times ahead. “Not necessarily tomorrow but surely in the year to come,” it said in its latest report. Whether shipowners take on board the positive effects scrapping more tonnage will have on net fleet growth, and in turn their bank balances, remains to be seen. If the lure of trading elderly tonnage that is mortgage free and can provide much-needed profit remains, 2011 could be another unpredictable year for net fleet growth but also the demolition market.

Source: Lloydslist. Tuesday, 14 November 2010

13 November 2010

Turkey’s Western Town Becomes “Ship Demolition Center” Of Europe

İzmir’s Aliağa becomes Europe’s ship demolition center-

İzmir’s Aliağa district, a center of industry with manufacturing plants, petrochemical and refinery facilities and host to a ship demolition yard, has become the “ship demolition center” of Europe.
The district has been attracting numerous European firms since last year due to its modern ship demolition facilities. A total of 127 ships, mostly from European countries, were demolished at the shipyard in Aliağa in 2009, while 187 vessels were disposed of in the region in the first 10 months of 2010, officials told the Anatolia news agency on Friday.

Adem Şimşek, chairman of the Ship Recyclers’ Association of Turkey (GEMİSANDER), said the ship demolition facility had been modernized recently, business health and safety conditions at work improved and a total of $10 million spent to prevent pollution. Şimşek also said European maritime firms preferred the Aliağa ship demolition yard thanks to the Aegean town’s environment-friendly facilities.

The chairman noted that nearly 1,800 people were employed at the ship demolition yard, adding 152,757 tons of ships had been demolished in the region in 2008, while the figure had risen to 297,881 tons in 2009.
“During the first 10 months of 2010, 187 ships weighing 333,280 tons in total have been scrapped in Aliaga. Our goal is to reach 425,000 tons by the end of the year. We aim to recycle 98 percent of the ships sent to our region,” he explained.

Şimşek said five to six countries currently deal with ship demolition; however, none of these countries have made progress in terms of Europe’s environmental standards. “Turkey is the only country among them that acts in accordance with environmental regulations and EU standards,” he noted.

Şimşek added that Turkey does not accept problematic and dangerous vessels, nuclear waste or ships with asbestos for disposal.

Source: 06 November 2010, Saturday / Today’s Zaman, İstanbul