17 May 2012

A Tsunami of Scrapping in Asia: Results from January to April, 2012.

The overcapacity of the fleet and the penury of cargo to transport are leading hundreds of ships towards Asian demolition sites. In these conditions, ‘’green recycling’’ is forgotten. They sell to whomever has the best offer and it is often he who is disregarding the protection of workers and the environment.

Mediterranean Shipping Company (MSC) sold, in the last four months of the year, 15 medium size container ships, representing around 180,000 tons of metal. At $500 per ton, that quickly fills up the piggy bank. Some of these container ships were constructed in 1992, in 1990, even in 1989. They are far from reaching the average age of container ships sent for ship-breaking in 2011 or 2010, which is 29 years. For the ship owners, it is more profitable to demolish the ship than to operate it.

417 ships went to be broken up in the beginning of 2012, making a rhythm of 28 ships per week. In 2011, the steady rhythm was only about 20 ships per week. That means a tsunami of ships to be demolished rushed into the Asian sites. The accumulated demolition permitted the recycling of over 3.5 million tons of metal. Of 417 ships to demolish, 410 (98%) went to Asia; 149 (36%) were constructed in Europe, 181 (43%) belonged to European ship owners.

By unit:
1 India, 194 (47%)
2 Bangladesh, 59 (14%)
3 Turkey, 55 (13%),
4 China, 53 (13%),
5 Denmark, 4 (1%)
6 Pakistan, 38 (9%)
7 Canada, 2
8 Belgium, 1

By tonnage of metal recycled:
1 India, 1.660.000 t (47%)
2 Bangladesh 585.000 t (16%)
3 Pakistan, 519.000 t (14%)
4 China, 516.000 t (14%)
5 Turkey, 172.000 t (5%)

By category:
1: bulk carrier, 148 (35%)
2: general cargo, 106, (25%)
3: tankers 66 (16%).

It is always in India where the majority of ships arrive, as much in number as in volume although Bangladesh is back on the market at the second place. The new government policy in Bangladesh as regards the demolition of ships will not turn the local practises upside down if only that the ships must from now on wait a week to obtain their official certificate and their authorization to be beached for demolition. The return of Bangladesh has not begun price wars and overbidding. On the contrary, the abundance of ships to be broken up has lowered the tariffs of the Indian subcontinent under the $500 per ton bar. But the habitual gap between the subcontinent and China is reducing. China, where the demand for metal is very high, offers to buy at around $425 per ton.

Japan has landed in India. A Japanese delegation, among which were MOL, NYK, Mitsubishi, and Kawasaki, met the Gujarat Chief Minister with the goal of converting Alang yards into an internationallevel yard, safe and eco-friendly as per guidelines of the IMO and future international regulations. The Japanese will be disposed to invest $22.5 million in this conversion project of Indian sites. Let us remember that MOL sent in these last months a series of large tankers for demolition in India, insisting on conditions of dismantlement respectful of the environment.

After detention, shipbreaking awaits:

88 (21%) of the ships going to be broken up are not controlled by a classification society belonging to IACS (International Association of Classification Societies) or are without classification. The substandard ships are therefore a priority: at least 268 (63%) were detained in worldwide ports with a rate of detention more than 75% for general cargo carriers, reefers and bulk carriers, and 66% for container ships. The rate of detention is 21 % for oil tankers. On the podium of detentions in this issue of Ship-breaking.com are four general cargo carriers, the Four Seasons, 11 detentions between 2003 and 2012, the Chronis, the Selen and the Orient III and a gas tanker, the Patchawaradee-8, 10 detentions each. (cf.p 19, 25, 29, 34, 37).

Years and meters:

The age of ships sent away ranges between 15 years for the container ship ACX Hibiscus, victim of a colllision at Singapore, and 83 years for the Great Lakes bulker Maumee, demolished in Canada. The average age is 29 years. 127 ships have a length less than 150 m, 155 measure between 150 and 199m and 135 more than 200 m. 11 ships measure more than 300 m among which the Oriental Nicety ex-Exxon Valdez and her sistership the S/R Long Beach. The largest ship to be broken up was the single hull VLCC tanker Antiparos, with a length of 333 m.

Source: Robin Des Bois. 7 May 2012

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