30 November 2011

Slump in freight market leads to surge in shipbreaking

Ship owners are a worried lot today as a depressed freight market has been taking a toll on their earnings for the last almost two years now. But players at the other end of the business - shipbreaking - are increasingly cashing in on the shipping industry downturn.

Generally, bouts of frail freight market make it expensive for shipping companies to deploy older vessels, prompting them to turn the ships over to the scrap yard.

And this makes it a boom time for shipbreakers, especially when prices of steel scrap spiral, as it is happening at present.

“Increasing global shipping capacities against a backdrop of weakening in economy will lead to a surge in shipbreaking activity in the next couple of years. India's shipbreakers will acquire a larger market share globally, supported by favourable demand for steel scrap and limited competition from neighbouring markets,” a report by CRISIL says.

In 2009 and 2010, the volumes of global shipbreaking aggregated about 44 million gross tonnage (GT), which is almost twice the volumes of the four proceeding years.

Mr Gurpreet Chhatwal, Director of Crisil Ratings, points out that new ships ordered in 2006-08 will be ready for delivery by 2012 and result in expansion of global capacities by over 25 per cent. “However, global trade is expected to slow down, driving reduction in freight rates in next two years. And this will improve economics of increased scrapping of older ships,” he said.

Crisil estimates that of the 180 million GT of global shipping capacities over 20 years old, about 55 million GT will come to the breaking yards in the next two years.

The global market share of India's shipbreaking industry, located at Alang in Gujarat, is expected to grow to 40-45 per cent in the next two years, from 35 per cent in 2010.

Legal restrictions on shipbreaking in Bangladesh and China's higher shipbreaking costs are expected to help Indian players.

In the last three years, the revenues of 52 Crisil-rated shipbreakers, which account for about 46 per cent of the Indian shipbreaking industry, increased at a compound annual growth rate of 46 per cent, helping these players nearly double their net worth.

Source: Hindu Business Line. By Amit Mitra (amitmitra@thehindu.co.in). 29 November 2011

Shipbreakers cash in on shipping industry downturn: CRISIL

CRISIL Ratings has come out with its report on shipping industry. According to the rating agency the global market share of India’s shipbreakers is expected to grow to 40-45% in the next 2 years from 35% in 2010.

Ban on iron-ore mining to benefit Indian players

CRISIL believes that increasing global shipping capacities against a backdrop of weakening in economy will lead to a surge in ship breaking activity in the next couple of years. India’s shipbreakers will acquire a larger market share globally, supported by favourable demand for steel scrap, and limited competition from other markets, including China and Bangladesh.

Trends for India’s shipbreaking industry, situated at Alang, are counter-cyclical to those for the global shipping industry. Bouts of weak global freight rates make it expensive for ship owners to operate old ships—this generates a surge in shipbreaking activity. Depressed global freight rates since 2009, and high prices for steel scrap have resulted in a spurt in shipbreaking. In 2009 and 2010, the volumes in global ship breaking aggregated around 44 million gross tonnage (GT)—twice the volumes of the 4 preceding years.

Expansion in global shipping capacities (with the arrival of new ships), and declining freight rates will continue to propel interest in shipbreaking. Says Gurpreet Chhatwal, Director, CRISIL Ratings, “New ships ordered in 2006-08 will be ready for delivery by 2012, and result in expansion in global capacities by more than 25 per cent. However, global trade is expected to slow down, driving reduction in freight rates in the next 2 years. These factors will together improve the economics for increased scrapping of older ships.” CRISIL estimates that of the 180 million GT of global shipping capacities that are more than 20 years old, around 55 million GT will be available for breaking in the next 24 months.

The global market share of India’s shipbreakers is expected to grow to 40-45% in the next 2 years from 35% in 2010. Uncertainty regarding legal restrictions on shipbreaking in Bangladesh, and China’s higher shipbreaking costs will help India’s players bid more competitively on ship purchases. Shipbreakers will also benefit from favourable demand economics in India for steel scrap extracted from shipbreaking. Shortage in supply of iron ore, following ban on iron ore mining in Karnataka, and possibly other states, will keep demand for scrap buoyant in India in the next 2 years. The shipbreaking industry meets 30% of India’s requirement for steel scrap.

In the last 3 years, the revenues of 52 CRISIL-rated shipbreakers (constituting 46% of the shipbreaking industry in India) increased at a compound annual growth rate of 46%, helping these players nearly double their net worth. Adds Manish Gupta, Head, CRISIL Ratings, “Efficiencies of scale and strong growth opportunities will strengthen the business risk profiles of India’s shipbreakers. However, the sector will remain vulnerable to key risks such as environmental concerns, economic cycles, sharp movements in scrap steel prices, and fluctuations in forex rates. Players who scale up operations steadily, while simultaneously adopting a disciplined financial policy, and hedging foreign exchange exposures, stand a better chance than other players of having their ratings upgraded.”

Source: Money Control. 29 November 2011

Sachana shipbreaking yard told to fold:

Sachana shipbreaking yard was set up in 1978

The state’s forest and environment department has ordered immediate closure of the three-decade-old Sachana shipbreaking yard in Jamnagar, saying it is a part of the Marine National Sanctuary and poses threat to the aquatic flora and fauna there.

Following a meeting on November 22 which was presided over by state forest minister Mangu Patel, the principal secretary of the forest and environment department sent a notice to his counterpart in the ports department.

According to the notice (a copy is with The Indian Express), shipbreaking activity at Sachana port, which ensures an annual turnover of Rs 200 crore for the Gujarat Maritime Board and employs over 5,000 skilled and unskilled labourers, is illegal and harms Marine National Sanctuary spread over 456 square km in Gulf of Kutch near Jamnagar. The release of arsenic, mercury, asbestos and oil pose threat to aquatic fauna and flora, the notice says.

This shipbreaking yard was set up in 1978.

The notice further mentions that this activity needs a permission from Supreme Court and that the GMB should make refunds to those who recently took plots on lease as the area is part of sanctuary. The notice has ordered immediate shutdown of the yard or else GMB officials will be held responsible.

The Marine National Sanctuary is home to octopus, dolphins, jelly, star fish and rare corals.

The forest department has done no survey or reasearch so far to find out the scale of damage to ecology in all these years.

While GMB Chairman B K Sinha, to whom notice has been served, and vice-chairman Pankaj Kumar, did not respond to several calls by The Indian Express, other officials expressed their anger over terming an activity illegal 30 years later.

Though notice was served on November 22, the yard is yet to shut down, with port officer G G Pande saying he is yet to receive a copy of the notice.

Pande said of the total 18 breaking plots, 15 are operational at Sachana, which serves as a secondary breaking yard to Alang.

Sachana is the final destination for smaller ships weighing up to 5,000 tonnes and are too small to be dismantled at Asia’s biggest shipping yard at Alang in Bhavnagar district.

“The notice has been suddenly served. It is not possible to shut down an activity, which has been going on for 30 years now,” said a top official from GMB. “The matter is being referred to Chief Minister Narendra Modi’s office as he holds the port portfolio.”

At the heart of the controversy is the tussle between 2 departments since the settlement procedure was conducted by the revenue department during 1982 to 1998 following formation of Maine National Park and Sanctuary in 1980.

Until 1980, the area was under the port authorities and at time of formation of Marine National Sanctuary, it went to forest and environment department. To settle land issues related to this huge area of Marine National Sanctuary, the revenue department conducted a settlement survey, which began in 1982. Some 56 individual applicants, who owned salt pans, made their claim, but the GMB never made any claim on this land.

The state government, based on the settlement survey, declared disputed land as part of Marine National Sanctuary in 1992. The forest and environment officials say that since then, they have been communicating with the GMB to stop shipbreaking activity and vacate the land.

“All these years, we have been asking the GMB to vacate the land,” said Jamnagar Chief Conservator of Forest Ravidutt Kamboj.

Source: The Indian Express. By Hiral Dave. 29 November 2011

25 November 2011

No plans to free MV Miner:

SYDNEY — There’s no change in the federal government’s stand on the MV Miner, which has been stranded on the shores of Scatarie Island for 2 months.

Speaking after the dedication ceremony for the MV Highlanders, Minister of State for Transportation Steven Fletcher reiterated past points made by the federal government on the derelict bulk carrier.

“I communicated that the federal government has 2 primary responsibilities,” Fletcher said of a meeting last week with an all-party delegating from Nova Scotia.

“One is to ensure that waterways remain navigable, and secondly, that the environmental impact would be minimized.”

Fletcher said the 230-metre ship is not a navigational hazard and that any potential pollutants have been removed.

The minister said progress on the issue was made during the “thoughtful discussion.”

“We’ve also, I thought, had a very good discussion on how to keep one another informed and how we can work together, but also on a go-forward basis to review legislation both federally and provincially for any potential proactive measures that can be taken to deal with this type of situation in the future.”

Transport Canada is investigating to see if any legal action can be taken against the ship owner or the tug company, Fletcher said.

Questions turned from ships that could be recycled to those that already have been recycled during Fletcher’s meeting with reporters.

Marine Atlantic’s new vessels — the MV Highlanders and the MV Blue Puttees  — replaced the MV Joseph and Clara Smallwood and the MV Caribou, which ended up in a controversial ship-breaking yard in India.

Fletcher said the federal government feels no responsibility for the final destination of the two ships.

“The disposal of ships are operational decisions of Marine Atlantic,” he said. “They complied with international marine organization guidelines and once you sold a ship and it gets resold and resold, it is tough.”

Wayne Follett president of Marine Atlantic, said the corporation followed a comprehensive process of public tendering to select an international broker to sell the vessels.

“I’ve heard varying assessments of the yard they are in,” said Follett.

“We are currently, through the broker, having some monitoring conducted of that yard to see in fact how they do proceed to recycle the vessels and in fact whether they follow the green recycling rules. At this point in time we have no evidence to the contrary.”

Having the vessels recycled in an environmentally friendly yard was part of the sales agreement, Follett said.

If evidence surfaces that they were not recycled in a green manner, Marine Atlantic’s legal counsel will be consulted.

“In the end it will come down to a monetary question because they will have been recycled and whether there is value in us pursuing a monetary penalty,” he said. “We haven’t gone to that yet because we haven’t completed any monitoring of the project.”

Source: The Cape Breton Post. By Greg McNeil (gmcneil@cbpost.com). 24 November 2011

Demolition: A Threat to the Owner Pool?

Containership demolitions accelerated in 2009 in response to a downturn in demand, and the current market conditions may also potentially lead to an increase in demolitions. Currently almost 3% of fleet capacity is over the age of 25 and 6% over the age of 20 and moving towards a suitable scrapping age. Should this capacity be scrapped, however, it may potentially represent the departure of a number of owners from the market.  

Who Owns What?

To examine where future scrap tonnage may potentially come from, the Graph of the Month splits the fleet over the age of 20 into 4 categories related to the size of the vessel owner’s fleet.

Of the 36 “large” owners who own boxship fleets with a total capacity greater than 100k TEU, there are 21 owners (58%) who own vessels over the age of 20 years. These vessels number 201 of a combined 0.45m TEU, 4% of this owner group’s total fleet capacity, and 52% of all capacity over 20 years of age.

Comparing this to 20+ year old ton-nage belonging to “small” owners (fleets with a total capacity of between 10-50k TEU), 10% of their total fleet capacity is over the age of 20; 126 vessels of 0.19m TEU (22% of the 20+ year old fleet). This capacity is spread between 27 owners, out of a total of 80 “small” owners.

Meanwhile, 19% of the combined fleet capacity of the 481 “smallest” owners (fleets of 10k TEU or less) is over the age of 20; 300 ships of 0.19m TEU (21% of all 20+ year old boxships). As such, it is clear that the fleet share of aged capacity is imbalanced between owners, and thus demolitions would impact the fleet size of smaller owners significantly more than that of larger owners.

Just One Ship:

The graph also splits the ‘aged’ capacity of each owner group one step further, showing what proportion of the owner’s fleet is over the age of 20. No “large” owner has a fleet of which 50% or more of the capacity is over 20 years of age. However, if you compare this to the “smallest” owners’ fleet, 62% of their 20+ year old capacity belongs to owners with no vessels under 20 (and 27% for “small” owners), illustrated by the white bars. Furthermore, of the 203 “smallest” owners with ships over the age of 20, 124 of these owners (57 charter owners and 67 operator owners) have only a single ship, thus just one demolition means withdrawal from boxship ownership altogether.

As a result, although 6% of the capacity of the global fleet is over the age of 20, a significant amount belongs to small owners who would have to forego boxship ownership to be part of a concerted scrapping effort. The impact of this on the ownership structure of the boxship fleet may potentially be severe. 19% of all boxship owners lie within the white bars on the graph, while 18% of all owners lie within the white bars and only own one vessel. Whether this potential consolidation of ownership is a positive or negative is open to discussion, but it does appear that consolidation could be an immediate impact should weak market conditions and “cascading” force scrapping to accelerate.

Source: Shipping Intelligence Network. By Mr Hashim Abbas. 24 November 2011

Oil Tankers Valued as Scrap Jump Fivefold as Returns Collapse:

Nov. 25 (Bloomberg) -- The number of the largest oil tankers valued at scrap-metal prices jumped fivefold in a year as a glut of the vessels cut their earnings to the lowest level since at least 1997, Seasure Shipping Ltd. said.

101 very large crude carriers are now valued at demolition prices, up from 19 a year ago, the London- based shipbroker’s VesselsValue.com unit, which publishes prices of more than 45,000 vessels, said by e-mail yesterday. The global fleet contains 575 of the ships. The average age of the 101 VLCCs at scrap value was 18 years, according to Seasure.

“A lethal combination of falling asset values driven by poor earnings, financial distress and a strong market for scrap steel has beached an increasing number of vessels at or close to demolition value,” Alex Adamou, lead quantitative analyst at VesselsValue, said in the e-mail. “A vessel which would have traded at an 81% premium to her demolition value in January now finds herself valued as nothing more than a floating piece of steel.”

Frontline Ltd., the world’s largest VLCC operator, said this week it’s seeking talks with creditors and may run out of cash and breach loan terms. Earnings from the vessels averaged $11,372 a day in the third quarter, the lowest since at least 1997, according to Clarkson Plc, the world’s biggest shipbroker. General Maritime Corp., the 2nd-largest U.S. oil tanker owner, filed for bankruptcy Nov. 17.

Oil Demand:

Tanker owners ordered too many new vessels during a 4-year boom that lasted to 2008, creating an oversupply that’s depressed returns and ship prices as global demand growth for crude weakens. In the Persian Gulf, the largest loading region, ships competing to haul crude have outnumbered cargoes by 16% on average this year, according to weekly shipbroker and owner surveys by Bloomberg.

Returns for VLCCs will average $15,000 a day for the next 2 years, less than half of the $34,500 they need to break even, Pareto Securities ASA said in a report last month. Average earnings for the vessels, which peaked in 2004 at $97,000 and were at $93,000 four years later, fell to $19,000 by 2011, according to the Oslo-based investment bank.

Prices for 15-year-old VLCCs have tumbled 44% since the start of the year as scrap values rose 2%, said Adamou of VesselsValue.

Demolition value is calculated by multiplying the price of steel scrap by light displacement long tons, or the weight of a ship’s hull, machinery and equipment.

About 47% of crude oil traded is shipped by sea, Pareto said.

--Editors: Dan Weeks, Sharon Lindores.

Source: By Michelle Wiese Bockmann (mwiesebockma@bloomberg.net). 25 November 2011

Hazardous waste found in Indiana Harbour and Ship Canal in the USA:

High levels of polychlorinated biphenyls (PCBs) were found by University of Iowa researchers in the deep sediment blow the Indiana Harbour and Ship Canal (IHSC) in the area of southern Lake Michigan. This is a large cause for concern because PCBs are a highly hazardous waste that has been shown to cause cancer among other serious illnesses.

PCBs were originally commonly used as coolants in transformers and electric motors. It has now been classed as a persistent organic pollutant and production of PCBs is now banned in the UK.

The hazardous material can be exposed to the human body through a number of mediums, including through -
Ø      contact with the skin,
Ø      contaminating the food and drink we consume, or
Ø      the air we breathe.

For this reason, PCBs when found must be taken with extreme care. The study by UI was the second study to the area, the first of which found PCBs to be present from the sediment floor to the water and air. This second study, whereby researchers drilled two excavations into the floor of the canal, found the concentration of the PCBs to be much greater.

 The presence of PCBs on this site is of even greater concern due to the fact that the site is due to be dredged in early 2012 by the U.S. Army Corps of Engineers to restore adequate navigational depth to maintain the canals use for large ship traffic.

Hornbuckle and Martinez (UI college of Engineering professors and co-authors of the study) recommend that the dredging strategy should now be adapted to consider the presence, and large concentration levels, of PCBs in order to minimise the potential exposure to PCBs: “it’s not the act of dredging that is the problem. The problem is when you leave contaminated chemicals at the surface that continue to be released forever”. However, researchers have acknowledged that the engineers may not dredge deep enough to expose the PCBs. The IHSC will need to decide whether they wish to go ahead with works as planned with the added risk of exposure, or change the plans and potentially disrupt the productivity of the harbour, but ensure that no PCB exposure is possible in the future.

Source: Lucion Marine. 14 September 2011

24 November 2011

Scrap to improve profits in OSV sector:

Calls for more scrapping of older offshore support vessels (OSVs) were welcomed from operators and builders alike during the opening session of TradeWinds Offshore Marine conference in Singapore on Thursday.

Speaking to more than 140 delegates, Hallin Marine’s business development director John Payne suggested that supply would continue to outstrip demand as long as a market remained for older tonnage. Payne welcomed the development of new designs from fellow panelist Torgeir Haugan of STX OSV but questioned whether the market ‘could afford’ the new designs in a market where ‘price comes first, technology second’.

Highlighting a long-term shift from AHTS to PSVs in Asia, Fearnley’s broker Harald Paulsen Lovik told delegates during the Q&A session that European vessel designs incorporating greater fuel efficiencies, carrying capacities and lower emissions were gaining ground in Asian markets.

But despite predictions of growing demand for OSVs to service deepwater E&P activity in China, Malaysia and Indonesia, Lovik predicted that day rates would remain flat for the next 9-12 months, giving rise to questions of whether charterers would be prepared to pay for more expensive and technically advanced boats.

Wärtsilä VP, Riku-Pekka Hägg noted that while there was interest in high tech vessels in Asia, the enthusiasm was not reflected in the charter rates. He added that ‘modest steps’ towards high end vessels were being driven by legislation in market characterized by an ‘extreme focus on cost.’

NHST Events global reach extends to the most traditional and the most dynamic shipping centres of the world, with events now running in Shanghai, Singapore, Copenhagen, Athens,Oslo, Istanbul and Bermuda.
Our mission is simply to deliver exceptional value for time for our speakers, delegates and sponsors through a combination of informative presentations and lively social functions.

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Source: NHST Events Press Release. 24 November 2011

GMS weekly report on shipbreaking industry for WEEK 46 of 2011:

Ø    Turmoil persists
Ø    Bangladesh still absent
Ø    No ideas on levels
Ø    China- only bright spot


Another week of declines and tails beset the Indian sub continent market leaving a majority of the Cash Buyers nearly clueless as to where levels actually stand today. Yet, we continue to see some who speculate, a massive risk given the trends of the past several weeks

With many vessels facing some kind of trouble viz end buyer renegotiations or rejections of vessels, the credentials of Cash Buyers that owners have committed to, really come under the microscope in these most testing of times. Given the present conditions, several sales may be needed in order to peg exactly where levels are, but for the time being, it is turning rather impossible to say with any real confidence, exactly what price any type of vessel is.

The continued absence of Bangladesh has not done the market any favors, their capacity to buy big and in bulk could relieve some of the pressures on both Pakistan and India.

Gadani buyers too saw no reason to lead the line on their own and consequently decided to cool off from their buying activities/reduced prices as well, simply echoing the sentiment in India.

Meanwhile, as currency woes persisted in India, many end buyers simply chose to remove themselves from the bidding tables, not prepared to offer at all. This meant that the usual cash buyer tendency to fix back to back during a falling market, was severely hampered as no price ideas or even guidance from local buyers (from the subcontinent) was being given.

As a result, with levels all over the board i.e. prices continuing to fall from within the subcontinent on the one hand and healthy speculative offers on part of some of the Cash Buyers on the other, showed where prices should clearly not be. This has resulted in a blank slate for the pricing table below, a possible first in the history of the GMS Weekly.

The only bright spot for the week was the return to some sort of form from the Chinese market, where iron ore prices rose. This had a knock on effect to the price of steel and demo prices therefore the local recycling industry witnessed an improvement of about USD 20/LT LDT to finish the week as levels headed nearer to the 400/LT LDT mark, up from the 350/LT LDT seen last week.

For week 46 of 2011, GMS demo rankings for the week are as below:

Market Sentiment
Gen Cargo Prices
Tanker Prices
USD 380/lt ldt
USD 400/lt ldt

Source: Hellenic Shipping News (Sourced from GMS Weekly). 22 October 2011

GMS weekly report on CHINESE shipbreaking industry for WEEK 46 of 2011:

Ø    Price rise

Closing The Gap!

The only positives from another week of turmoil and confusion in the international recycling markets were the return to some sort of form for Chinese market. Prices rose by some USD 20/LT LDT and many of the buyers - conspicuous in their absence in recent weeks - returned to the bidding tables.

One vessel did register into North China as the small asphalt tanker BLACK JADE (2,066 LDT) from Korean owners was sold for a price region USD 385/LT LDT. The 2nd vessel from these owners, the BLACK PEARL (2,262 LDT) make only come for sale upon conclusion of the first deal.

With Indian sub continent sentiment and prices weakening by the day, we may soon see prices only USD 50/LT LDT apart as opposed to the 100/LT LDT gulf apparent only last week.

Source: Hellenic Shipping News (Sourced from GMS Weekly). 22 November 2011

GMS weekly report on INDIAN shipbreaking industry for WEEK 46 of 2011:

Ø    Few signs of improvement
Ø    Unexpected money on offer for tonnage
Ø    Conflicting fundamentals making matters worse

Lurching Ever Lower!

Indian sentiment showed few signs of picking up this week as the slide towards the mid 400s/LT LDT on dry units continued. To that end, the market saw several cash buyers making bizarre decisions as offers were made at seemingly impossible levels this week. Evidently, a few Cash Buyers continued to ride the wave of optimism, confident that a market rebound may be in order, perhaps sooner than most anticipated.

Unfortunately, the state of Indian market remains in shambles and such gung-ho levels on offer, do not appear to be backed by end users within the local market.

So what remains in store for India? Where does the ongoing decline level off?

Surprisingly, 2 of the key local fundamentals have been at odds with one another and have been performing at opposite ends. The local steel plate price this week steadied off and even showed marginal signs of improvement, but that did little to boost local confidence as the Indian Rupee continued its disastrous tumble against the US Dollar (hitting a possible all time record low).

As such, the already nervous local sentiment that was struggling to cope with a rapid decline over the recent past, did not manage to find any faith in a level off (via the steel prices) and the offers for ships continued to drop - and even withdrawn in many cases. This has made it extremely difficult to peg exactly where levels for tonnage really stand.

While the prevailing pessimism has yielded fears of a further drop in the Indian Rupee during the coming week, we do hope for a bounce back (be it marginal), just so business can continue as usual in Alang.

Source: Hellenic Shipping News (Sourced from GMS Weekly). 22 November 2011

GMS weekly report on BANGLADESH shipbreaking industry for WEEK 46 of 2011:

Ø    No positives
Ø    Bangladesh stimulus needed

Out Till New Year!

With still no positive news to report regarding the court hearing in Bangladesh (the date was once more put back in familiar posturing by the relevant authorities), the industry faced yet another week with the big hitters out of action.

There is some talk that we may not see a market extension granted until perhaps even the New Year and into Jan 2012, with the judge seemingly intent to keep the doors of the industry firmly shut until firmer standards are implemented and conditions categorically improved.

Of course, such an action will only push levels from the competing neighbors even lower as one of the major competitors (i.e. Bangladesh) for larger tonnage remains absent from ongoing negotiations.

At this stage, a Bangladesh return to the action may be just the stimulus the global recycling markets need to stabilize (in terms of prices as well as overall demand).

NO Market Sales Reported

Source: Hellenic Shipping News (Sourced from GMS Weekly). 22 November 2011

GMS weekly report on PAKISTAN shipbreaking industry for WEEK 46 of 2011:

Ø    Indian news filters through
Ø    Impetus needed

Frozen in Fear:

Having seen a decent share of the tonnage in the past few weeks head towards the shores of Pakistan, there was something of a freeze on buying this week as news and sentiment started to filter through from India.

As was the case with their competing neighbors, there appeared to be a growing reluctance from Gadani recyclers to even offer on most available units, as many of the hungry buyers had already filled their yards or have decided to hold off on the offering, in the expectation that further falls in price could be forthcoming.

It was therefore another blank week for the sale's board with some urgent impetus needed to fire up the market once again.

NO Market Sales Reported

Source: Hellenic Shipping News (Sourced from GMS Weekly). 22 November 2011

Bangladesh Shipbreaking: Lack of safety gears claim yet another

A worker of a Sitakunda shipbreaking yard in Chittagong died yesterday morning after falling into a 50-feet elevator shaft of a scrap ship. It is the 16th casualty of workers in the current year despite court's directions for taking proper safety measures.

Moinul Hossain, 28, son of Sabed Mia, from Manda upazila of Naogaon, was a worker of Jahanabad Shipbreakers, a yard of Prime Group in Kadam Rasul area of Jahanabad under the upazila.

Officer-in-Charge (OC) Nur Mohammad of Sitakunda Police Station confirmed the accident.

Moinul, working inside a scrap ship, slipped and fell into an elevator shaft around 11:30am, Tapan Datta, convenor of Ship Breaking Workers Trade Union Forum, told The Daily Star.

Seriously injured, Moinul was brought to Chittagong Medical College Hospital (CMCH) at 1:00pm where the doctors declared him dead.

One of his co-workers, preferring anonymity, said the lift was removed earlier and the space was empty. “It was quite dark there and there was no cautionary sign to pass the area,” he said.

With yesterday's accident, 16 workers have so far died in 8 separate accidents in 8 shipbreaking yards in Sitakunda this year. Of the deceased, 6 died in October due to toxic gas poisoning.

Shipbreaking yards in the coastal region have been conducting operations without adequate safeguards for years, disregarding repeated accidents and Supreme Court directives to ensure security of the workers' lives.

Source: The Daily Star. 22 November 2011

No more conditional import of toxic ships in Bangladesh:

Industries secretary asked to appear at SC with shipbreaking rules on Dec 14

The Supreme Court yesterday directed the government to frame by December 14 a set of rules to free the shipbreaking industry from pollution and ensure safety of the workers.

It ordered the industries secretary to appear before it with a copy of gazette notification on the rules at noon on that day.

The order came upon a petition against a High Court order that extended the time limit for conditional import of toxic ships for scraps. Bangladesh Environment Lawyers Association (Bela) filed the petition in May.

A 7-member bench of the Appellate Division of the SC headed by Chief Justice Md Muzammel Hossain also rejected a government prayer for extending the HC order that had permitted conditional import of toxic ships. Attorney General Mahbubey Alam moved the prayer.

In last 40 months, at least 36 shipbreaking workers were killed and many injured in accidents that could have been averted by having adequate safety precautions.

In March 2009, the High Court directed the government not to allow import of any hazardous vessels and to draw up rules and operational guidelines for ensuring safety of the workers.

Despite the court orders, the environment ministry issued temporary clearance certificates and delayed making the rules.

Instead of taking measures to improve the working conditions at the shipbreaking yards, the owners appealed to the High Court to allow them to import toxic ships.

Bela's counsel Iqbal Kabir Lytton told The Daily Star that no toxic ships could be imported now since the apex court had not given any permission to that end.

During yesterday's hearing, Fida M Kamal, chief counsel for Bela, told the court that the Appellate Division and High Court Divisions at different times since 2006 had directed the government to frame rules for freeing the industry from pollution and for ensuring workers' safety.

But the government has yet to comply with the directives, he added.

On December 15 last year, an HC bench headed by Justice M Imman Ali, now an Appellate Division judge, asked the government to frame rules in light of 6 existing laws within the next 3 months. The bench also restricted import of ships till framing of the rules.

The 6 laws are -
Ø    The Basel Convention Act, 1989;
Ø    Bangladesh Environment Protection Act, 1995;
Ø    Bangladesh Marine and Fisheries Ordinance, 1989;
Ø    Bangladesh Labour Act, 2006;
Ø    Bangladesh Territorial Water and Maritime Zone Act, 1974; and
Ø    Environment Protection Rules, 1997.

Following a petition filed by Bangladesh Ship Breakers Association, another HC bench headed by Justice AHM Shamsuddin Chowdhury Manik on March 7 this year permitted import of toxic ships for 2 months and directed the government to formulate rules by that time.

The HC on May 7 extended its March 7 order for another 2 months.

Meanwhile, the HC bench headed by Justice AHM Shamsuddin Chowdhury on July 21 extended till October 12 its order allowing conditional import and dismantling of toxic ships. It, however, said the importers and shipbreakers must ensure that the workers and the environment were not exposed to any danger.

Hearing a petition of Bela, the same bench on October 27 said it would not extend its order permitting import of toxic ships.

It also issued 4 directives on the government to ensure safety of the scrapyard workers.

Source: The Daily Star. 22 November 2011

Bangladesh Supreme Court summons industries secy:

Dhaka, Nov 21 (bdnews24.com) — The Appellate Division has asked the industries secretary to present himself with a gazette of the shipbreaking industry regulations.

A six-member bench led by chief justice Mozammel Hossain on Monday ordered the secretary to be present with the gazette on Dec 14.

Attorney general Mahbubey Alam represented the state and Bangladesh Ship Breakers' Association was represented by Anisul Haque.

The petitioners, Bangladesh Environmental Lawyers' Association (BELA), were represented by Fida M Kamal and Iqbal Kabir.

Iqbal Kabir told reporters after the hearing, "Despite the court's orders, the government is yet to create a set of regulations or the management of the shipbreaking industry.

"The court has postponed the hearing and asked the industries secretary to present himself after formulating regulations and publishing a gazette," he said.

Earlier, the court allowed a limited amount of ships to be imported on the plea of BSBA on May 5 and asked the government to formulate regulations for the industry.

Source: bdnews24. 22 November 2011