Prices of different steel products have gone up in the country as the shipbreaking sector, the main source of raw materials, has been going slow over some yet to be settled legal matters and tax rows with the relevant authorities, traders said on Thursday.
Country's apex court is yet to lift its injunction fully against importation and dismantling of scrapped vessels and instead asked the ministry of industries (MoI) to further rationalise a proposed policy for the shipbreaking industry.
On the other hand, the stalemate over the payment of an advance tax of 5% is yet to be removed leaving the shipbreaking sector in limbo, shipbreakers said.
"Due to these legal tangle and tariff row the performance of the shipbreaking sector is yet to return to the level of 2009, when more than 200 ships weighing some 2.2 million tonnes were dismantled," said Subhankar Barua, an executive of a large ship-breaking firm.
"Earlier in 2008 and 2007, Bangladesh Ship Breakers Association (BSBA), a body of some 125 ship-breakers, dismantled 170 and 150 ships respectively," according to a data of the association
Despite legal obstacles BSBA dismantled 145 vessels weighing some 1.7 million tonnes in 2011, against 75 ships weighing some 1.0 million tonnes in the previous year.
The BSBA has lodged an appeal seeking the levy of 5.0% duty to be lowered to 0.5%. But a decision in this regard is yet to be reached.
So importers are reluctant to import scrapped vessels for recycling, shipbreakers said.
"A 5% duty means each shipbreaker will have to pay an additional $25 a tonne. Currently the price of scrapped ship is around $500 per tonne, another leading shipbreaker Kamaluddin Ahmed told the FE.
The court asked the BSBA to rationalise the policy for shipbreaking for ensuring precautionary measurers against accidents to protect lives of workers and taking steps to stop pollution of environment, officials of the ministry of industries said.
Earlier the shipbreaking sector had faced obstacles since early 2010 to late last year as rights groups and environment activists engaged BSBA in courts alleging abuse of human rights and causing environmental pollution.
The BSBA supplied some lion's portion of the country's annual requirement of around 3.0 million tonnes in 2009. But now it is unable to supply even the half of the requirement which has been rising gradually due to a real-estate boom and undertaking series of projects to build infrastructure, traders said.
There are more than 800 medium and small re-rolling mills in the country which entirely depends on the steel plates supplied from shipbreaking yards, re-rolling mills staff said.
According to the consumers, the price of mild steel (MS) rods has been going up gradually across the country over the past couple of months.
A continuous depreciation of taka against the US dollar and appreciation of fuel and electricity also contributed to the sharp rise in price of MS rods, traders said.
As of now different grades (of thickness) of MS rods are being sold between Tk 66,000 and Tk 73,000 per tonne in retail markets, hitting hard house construction and infrastructure building, across the country.
The prices of the same MS rods in retail market were between Tk 53,000 and Tk 58,000 two months earlier.
dismantled around 50% of the ships to replace as the top shipbreaker of the
world. But now it has slipped out of the ranking, ship breakers said. India
Each year around 800 old ships are scrapped, many of them on the beaches of
Bangladesh and , said
Dutch shipping NGO Shipbreaking Platform. Pakistan
Source: The Financial Express. By Nizam Ahmed. 21 January 2012