20 July 2011

Bangladesh shipbreaking comes again to a halt:

Prices of steel products, mainly that of mild steel (MS) rods are likely to soar in the country as the shipbreaking industry, the main source of the metal, is virtually out of operation for more than a year over environmental row, traders said on Tuesday.

A metric tonne of MS rods is now being sold between Taka 54,000 and Taka 61,000, depending on their grades in retail market.

The shipbreaking was halted again for indefinite period early this month as the High Court re-imposed a year-old ban which it had lifted in May for two months under certain environmental pre-conditions.

The output of the sector might be the lowest in 2011 as few ships were either dismantled or left half-done due to the ban on shipbreaking, following litigations filed by a leading group of environmentalists.

In Bangladesh, one of the top ship recycling nations from 2004 through 2008, scrapped ships have been the main source of steel to meet the country's requirement of some four million metric tonnes a year.

In 2010 only 130 ships were dismantled to retrieve 1.3 million tonnes of steels for re-use or recycling in 800 steel re-rolling mills of the country. The steel plates received from scrapped ships are cheaper than imported steel billets.

More than 40 scrapped ships were either beached or ready to beached in late June as the ban was lifted for two months under certain environmental pre-conditions.

The preconditions included freeing the old ships of toxic elements before dismantling, setting up effluent treatment plans and giving safety gears to the workers.

The High Court banned the beaching and dismantling scrapped ships early last year as environmentalist groups alleged that the conventional shipbreaking caused serious environmental pollution and risked lives for poorly equipped workers at the yards.

Traders do not deny the observation of the environmentalist and rights groups, and say they are trying to improve the situation gradually.

But in reality steel re-rolling mill owners prefer cheaper steel plates from the dismantled ships as the impoverished Bangladesh often lacks financial capability to import the item at huge costs which is now nearly $600 per tonne in the international market.

"The ban was re-imposed by the High Court on July 4 to ensure that the shipbreakers adopt safety measures to protect environment and reduce accidents during dismantling scrap ships," a leading shipbreaker told the FE.

However, he said, measures were being taken to convince the court and the environmentalists that shipbreakers have already taken adequate steps to reduce the level of environmental pollution and reduce accidents, by taking safety measures and giving safety equipments to the workers.

The government recently declared the shipbreaking as an industry and urged the relevant firms to abide by environmental and safety laws to help reduce loss of life and pollution of environment.

The output in the sector may be the lowest in 2011 as few ships were either dismantled or was left half-done due to court orders, sought by for two months under certain environmental pre-conditions environmentalist groups.

In 2009 ship-breakers retrieved 2.2 million tonnes of steel dismantling some 220 ships and the previous year the retrieval was 1.6 million tonnes from 172 scrapped ships, according to the Bangladesh Ship Breakers Association (BSBA).

Some 70 percent of the dismantled ships were scrapped tankers and bulk carriers. Most tankers are as big as 100,000 DWT and dismantled by workers using traditional hammers, axes and acetylene flames.

It often takes some 6 months to one year to dismantle a ship, depending on its size.

Chittagong-based BSBA says the Shipbreaking Industry is a 100 billion taka ($1.5 billion) private enterprise comprising 110 shipbreakers that employ some 150,000 workers directly while two million others are also engaged with or dependent on it indirectly.

"Following the lower performance this year Bangladesh is poised to become the smallest shipbreakers among others including Pakistan India, and China," said Mohammed Amzad Hossain Chowhury, a leading shipbreaker.

He said from scrapped ships some 200 different items including steel plates, valuable products like bronze, copper etc, machineries, electrical appliance to and furniture are also retrieved and distributed across the country through different vendors.

The scrapped ships are procured from abroad on the basis of current market price of steel. A 10,000 DWT scrapped ship would now cost at $5.20 million at $520 per tonne, traders said.

Rights activists in Bangladesh say the cost to the environment and health of employees has been too high, however, with more than 1,000 workers killed on the job since 1996.

A 2003 government study found nearly 90 percent of workers suffered some form of accidental injury -- from foot injuries to serious accidents -- while working in Chittagong yards.

The World Bank in December reported widespread contamination of lead, mercury, and oil in the soil and water of Chittagong's beaches.

Source: The Financial Express. Nizam Ahmed. 20 July 2011

No comments: