29 July 2011

Chittagong speculation continues as the battle rages on between scrap steel value and health, safety and environmental concerns:

The High Court in Bangladesh has issued an extension to a previous order granting vessels access into Chittagong to be demolished on the Bangladeshi beaches. This has been issued in order to allow the Bangladeshi government more time to produce an official order on the regulations surrounding the health, safety and environmental impacts of shipbreaking.

In the mean time, Chittagong is back in business, or so it would seem. The announcement caused a reaction with vessel purchases and scrap value at all the major shipbreaking sites reacted accordingly.

Two vessels were purchased for demolition in Chittagong according to Lloyds List, with chemical tanker Dolphina reaching $530 per ldt. It was not reported whether this vessel carried an inventory of hazardous materials.

With the threat of valuable end-of-life vessels heading to Chittagong, India’s Alang Beach saw 5 new vessels bought last week, and reportedly favourable offers to ensure they remain a market leader.

Prices also rose in China, even though these still remain the lowest compared to Bangladesh, India and Pakistan and has seen purchases mainly from local owners. None the less China is still competing in the ship demolition market, and is getting increasing amounts of press for efforts towards green ship recycling, such as Dalian’s announcement to build the world’s largest green ship recycling yard in China.

Thus competition in the market seems to be a positive progression for ship recycling, hopefully ensuring health, safety and environmental concerns are becoming a necessity for all the leading breaking yards, especially with hints that Europe may be favouring the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships 2009 over the Basel Convention due to conveniences over transport of waste and hazardous materials. 

To this end, it has now been reported on Lloyds List that the Bangladesh Supreme Court retracted the extension after hearing an appeal from the Bangladeshi Environmental Lawyers Association (BELA), an association that has been extremely influential in the efforts to improve the standards of ship recycling in Bangladesh whilst maintaining the industry for the much needed employment and scrap steel the industry provides. The order will now be reviewed on 28th July.

Source: Lucion Marine. 26 July 2011

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