31 August 2012

Ship stranded off Cape Breton has been stripped of valuable metals, company says:

HALIFAX - A company that has committed to dismantling a ship that's been stranded off Cape Breton for almost a year is accusing another firm of stripping the vessel of all of its valuable metals.

Abe Shah, a senior partner with the Bennington Group, makes the allegation in a letter to the Nova Scotia government that his company released to several news media organizations.

Shah said the province's Natural Resources Department hired a company last year to remove floatable items such as chairs and tables from the MV Miner, but instead the firm removed all precious metals.

"In every room, most of the floatables are still present," Shah says in his letter to the department dated Aug. 9.

"Whereas the brass on portholes, the brass on the captain's tables, stainless steel kitchen tables bolted to the floor, copper cabling that ran from the stern to the bow and from the engines to the electrical units, etc. have all been removed.

"The contractor's actions have deprived the owner and Bennington of non ferrous-items valued at more than $500,000."

The letter does not identify the contractor. But last fall, the provincial government hired Dutch company Mammoet Salvage to remove loose items and contaminants from the ship.

Bas Coppes, the president of the company's American division, said crews weren't able to remove all the floatable items because of the winter weather. He also said allegations that his company was stripping the ship are "ridiculous."

"We never took any brass or any valuable metals from the ship," Coppes said Friday in an interview. "We removed things like blankets, pillows, mattresses, all small things, all loose things."

Coppes said he doesn't remember seeing anything particularly valuable on the ship, calling most of the items on board "trash."

Shah includes a photo in his correspondence with the Natural Resources Department that he says shows it's been stripped of brass.

Bruce Nunn, a spokesman for the department, said government employees oversaw Mammoet Salvage's entire operation and there is no evidence that valuable metals were taken.

"There's no record that anything other than environmentally hazardous waste was removed," Nunn said.

Asked if it's possible someone went on the ship to take the metals, Nunn replied, "The ship's been there unsecured for more than seven months."

In an interview, Shah said he's no longer sure his New York-based company will make a profit from salvaging the ship, but he has no intention of backing out because it could harm his reputation.

"I put my name to it," he said. "I have a commitment."

Shah said any delays in the dismantlement of the MV Miner rest with the provincial and federal governments.

Premier Darrell Dexter has repeatedly called on Ottawa to accept a greater role in removing the ship, but Transport Canada says it's the responsibility of the Bennington Group.

The MV Miner ran aground on Scaterie Island on Sept. 20, 2011, while being towed to a scrapyard in Turkey.

Removal of the 230-metre bulk carrier was expected to start this week after more than a month of delays, but so far, there's been no progress.

Shah said the company needs both levels of government to conduct a pre-demolition site survey of the MV Miner before any salvaging can begin.

The company's provincial work authority expires Aug. 31. The plan was to have the work completed before the more active part of the hurricane season, which is usually in September.

Source: Brandon Sun.By Jane Gerster. 17 August 2012

GMS report on shipbreaking industry for WEEK 34 of 2012:

An improving market in India set the tempo for a busy week in the ship recycling industry as the number of market deals concluded made it to double digits this week.

The activity though was solely concentrated into the Bangladesh and Indian markets, with both Pakistan and China missing out for another week.

The Turkish market has been very active of late as well, where levels have improved to such an extent over the past few months that they are now ahead of China in the price pecking order. As such, any vessels in the Mediterranean area today are more than likely to be heading to the shores of Turkey.

Pakistan has been actively competing with India over the past few weeks but has always been slightly behind on the numbers. Furthermore, the Gadani specialty of gas free for man entry for tankers (as opposed to hot works in both Bangladesh and India) have been slightly lacking of late, with containers and Handysize / Panamax bulkers being the flavor of the moment.

Meanwhile, Eid holidays have seen both Pakistan and Bangladesh largely offline for the past few weeks, but several perhaps speculative cash buyer deals were concluded into Chittagong, to the surprise of many.

Prices going into September tend to be on the bullish side, so cash buyers may be looking to speculate on a traditional seasonal shift in levels. Going into the final week of August therefore (with deliveries for mid to end September time), levels may be expected to persist.

Key factors going into week 35 will be how an already stuffed Bangladesh market and a keen to compete Pakistan react to the challenge laid down by a voracious India.

For week 34 of 2012, GMS demo rankings for the week are as below:

Sentiment Market
USD 435/lt ldt
USD 405/lt ldt
USD 425/lt ldt
USD 400/lt ldt
USD 425/lt ldt
USD 330/lt ldt

Source: Steel Guru (sourced from GMS Weekly). 28 August 2012

Shipping firms continue to face rough weather

August 19, 2012:  The financial weather forecast for the shipping industry continues to show turbulence ahead. It was a challenging period for the industry last quarter and the outlook remains the same for the coming quarters.

Bruised by a slump in trade, subdued freight rates and high fuel costs, shipping companies reported moderate to flat growth last quarter. Industry experts say the uncertainty in Europe and oversupply of new tonnage would continue to squeeze the margins of ship owners at least for the next few months, with a lot depending on how Chinese trade moves forward.


However, ship owners, who tilted more in favour of long-term contracts, could manage to get better yields, as the spot market continued to be relatively more depressed.

For instance, almost the entire fleet of Essar Shipping, which reported a 186 per cent increase in its first quarter net profit at Rs 53.9 crore, is in the long-term market. “This (strategy) is keeping us going strong. A tanker on a one-year time charter, for instance, earned between $18,000 and $21,000 a day, while the same asset on the spot market could hardly get $4,000 a day,” A.R. Ramakrishnan, Managing Director of the company, said.

Great Eastern Shipping, on the other hand, has 78 per cent of its dry bulk fleet and 44 per cent of its tankers on the spot market.

“Time charter rates have not improved significantly, but (even then) we decided to fix a couple of ships at reasonable rates for three to five years period. Some of these vessels were in the Aframax asset class,” G.Shivakumar, Group Chief Financial Officer (CFO), said in a post-results analysts conference call.


The April-June quarter started off on a brighter note, both for tanker and dry bulk ship owners. Tanker rates inched up in the first half of the quarter as Saudi Arabia stepped up crude production and the Iran tension heightened, prompting refineries to tank up additional oil. But this increase in rates was soon quelled as new vessels entered the market to chase this marginal rise in demand for crude movement — there was an estimated six per cent year-on-year fleet addition. In the dry bulk segment, a slight revival in steel and minor bulk trades moved up rates for smaller vessels a tad.

However, slowdown in iron ore exports from Brazil to Asia kept the bigger ships at bay. This got reflected in the movement of Baltic Dry Index, which tracks cost of movement of dry bulk cargoes across key ocean routes. The index rose from an average of 1,021 in April to 1,101 in May and then slid to 937 in June. Similarly, in the tanker segment, rates for a very large crude carrier rose from an average of $13,348 a day in March 2012 to $17,368 in April, only to slip to $16,362 in May and $7,085 in June.


Although relatively less volatile, the average TCY (Time Charter Yield) for the quarter was also lower across segments. For dry bulk ships, the TCY slipped from $16,569 a day in the first quarter of 2011-12 to $11,076 last quarter, a fall of 33 per cent.

Similarly, product carriers saw their TCY dipping 16 per cent to touch an average $13,770 during the first quarter of this fiscal from $16,326 in the year-ago period.

For crude carriers, the fall was comparatively less at four per cent — from $20,097 to $19,302 in the first quarter of this fiscal. Ship owners see no marked improvement in rates in the rest of the year. “Overall, I think for both the dry bulkers and tankers, freight rates are going to be under pressure in the next few months,” Ramakrishnan said. In the tanker category, analysts feel that any disruption in the Strait of Hormuz by Iran could have an impact on the tanker movement in the region. OPEC expects oil demand to grow only by 0.82 million barrels a day (mb/d) in 2013, as compared to 0.9 mb/d in 2012. A senior official of Shipping Corp of India (SCI) expected the freight market to pick up only from the second quarter of 2013.

“Bunker costs have gone up substantially compared to the year-ago period. Given the current market scenario, we have done our best,” he said.

SCI reported a net loss of Rs 54.87 crore for the quarter, the second successive quarter the firm was in negative territory. Experts agree that supply of new vessels and scrapping of old vessels will play a crucial role in movement of freight rates for the rest of the year.

“Scrapping activity is continuing, but is still not a very significant number. On and off you see 16 to 17-year-old ships getting scrapped, but unfortunately scrapping activity has not really picked up.

Scrapping for the first half of the year is about 6.5 million tankers, which is not a very large number,” Shivakumar pointed out.

While on the one hand scrapping was lesser than expected, new vessels continued to join the existing fleet chasing the same cargo. It is estimated that the product tanker fleet grew three per cent year-on-year (yoy), while the dry bulk fleet saw 15 per cent yoy additions during the quarter.


The industry has not seen any significant improvement in asset prices due to these inadequate scrapping trends.

Asset prices are mostly flat and were marginally down by five to 10 per cent only across certain segments, prompting ship owners to be cautious in their acquisition programmes.

The bottom-line for the shipping industry is thus clear — it will have to sail through a rough weather at least for some more months, before expecting clear blue skies again.

Source: Hindu Business Line. By Amit Mitra (amitmitra@thehindu.co.in). 19 August 2012

Bangladesh shipbuilding goes for export growth:

When it comes to shipping, Bangladesh is known mostly as a shipbreaking nation, with dozens of ageing container vessels heading towards its southern coast for scrap. However, in recent years it has also emerged as a shipbuilding country.

Shipbuilding yards in Bangladesh are now exporting small and medium-sized ships for the highly competitive European market.

Since 2008, Bangladeshi yards have manufactured and exported ferries, cargo vessels, and ocean-going multi-purpose ships worth more than $500m (£320m). The vessels were built for countries including Denmark, Germany and Finland.

It's a small beginning compared with giants such as China, Japan and South Korea. But industry owners say Bangladesh will continue to grow because it has several advantages over rivals.

"We have plenty of skilled manpower and our labour cost is cheaper than many other countries. On average, ship owners can save at least 15% of the production cost here," said Sakhawat Hossain, managing director of Western Marine Shipyard in Chittagong.

Jobs potential
Although a number of shipyards in Bangladesh now have the capacity to build vessels for international markets, Western Marine and Ananda Shipyard & Slipways, based near Dhaka, have been leading the way in production for overseas buyers.

At the moment, they can produce ships of about 10,000 tonnes and they are working to expand their facilities to build bigger vessels.

Western Marine, which is situated on the banks of the Karnapuli river in Chittagong, is currently building a cargo vessel that will be soon be plying the icy waters of the North Sea and Baltic Sea in Europe.

The industry is aiming to win orders of more than $2bn in the next five years. If that happens, it is expected to create many thousands of jobs.

Bangladesh has more than 100 shipbuilding yards, with most of them serving the domestic market.

Experts say nearly 70% of the country's cargo and 90% of total oil products are transported by small ships, cargo vessels and tugs through its coastal and inland waterways.

Hundreds of thousands of people use ferries and steamers to travel from one part of Bangladesh to another, and most of these vessels are built in the country.

Eurozone impact
But despite the industry's strengths and promise for the future, it is also facing some external headwinds. The current economic crisis in the eurozone has had an impact.

"We have 17 ships in our order book, worth more than 200m euros ($250m). But our European buyers are not getting any finance from the banks, which have become cautious to fund new ventures at this point. So we are affected," Mr Hossain said.

However, industry owners are confident their domestic market will help to overcome the tide.

With the Bangladeshi economy growing at a rate of about 6% a year, new smaller ships and cargo carriers are needed to transport goods and other raw materials from the main Chittagong port to different parts of the country.

Neighbouring India is also negotiating full transit facilities with Dhaka to transport goods to its nearly landlocked north-eastern states through Bangladesh. Goods are currently sent through a circuitous and mountainous route along the Bangladeshi border.

Once the transit agreement is finalised, then it will be cheaper for Indian traders to send goods by ship along Bangladeshi rivers up to the border and then take them by road to the north-eastern states.

The shipbuilding industry here hopes that if the global economy recovers, then it offers tremendous potential. Experts say more than 50% of the world's ships are more than 20 years old and need replacing.

More importantly, they say countries such as Japan, South Korea and China are building very big, specialised and hi-tech ships, and they are not interested in constructing smaller vessels.

"Globally, this small and medium-sized ship market is worth around $200bn. If Bangladesh can get 1% of this market, then it amounts to $2bn," says Dr M Rafiqul Islam, from the Department of Naval Architecture and Marine Engineering at the Bangladesh University of Engineering and Technology.

However, he points out that the country's infrastructure needs to be improved to attract orders for new ships. In addition, he says, investment is needed in research and development to take the industry to the next level to build bigger ocean-going vessels.

Bangladesh has a limited number of export goods and is keen to expand its range. It hopes its young shipbuilding industry will be a key element in achieving that goal.

Source: BBC. By Anbarasan Ethirajan. 20 August 2012

Graveyard shift:

A dying ship is scheduled to beach at the Alang-Sosiya Ship Recycling Yard. Ru drives out to a lonely spot at the northern end of the 10-km yard to find out how the ship on the horizon is holding up. He will also measure wind speed and strength of currents.

It’s not easy to guide an old ship the size of an apartment block to its final resting place in the few hours when high tides cover 11-12 metres of shore. From slack steering equipment to propellers that do not work, ageing ships tend to have all kinds of problems, including missing engines. But Ru, a shore pilot at the Alang-Sosiya Ship Recycling Yard, has guided many of these creaking giants on their last journey. “Call me Ru,” he says. He doesn’t want to reveal his name. “Someone sitting somewhere may file a case against me for working at Alang,” he says.

Unlike other ports, Alang has little navigational aids. After all, it’s a graveyard and all a ship has to do is climb onto the beach and wait to be hacked apart. However, imminent death does not make things easier. The 131 functional recycling plots at the yard always have dead ships at various stages of dismantling. The trick is to beach the new ship without banging it into the dead ones too hard and tearing apart valuable scrap metal.

Ru and the only other shore pilot work with a tool box that has just three things—a pair of binoculars, a walkie-talkie to communicate with the incoming ship’s captain and a good knowledge of the Gulf of Khambat and how it treats ships sailing into it.

Passenger ships are easier to guide as they are slim. Current or wind doesn’t drag them too much. Large oil tankers and carriers are broader and cause a lot of friction. However, both kinds have to be positioned for least resistance, which isn’t always easy because ship captains, who are from all over the world, rarely have any experience of navigating these waters. Besides, few have experience of beaching ships for dismantling.

For the past three months, Ru’s lonely spot, which he calls his outdoor office, has been hosting a six-tower oil rig called Petrobras XXIV—a structure so tall one needs binoculars to spot the bright helmets of workers cutting open its roof with blowtorches. The rig was planted somewhere in the Gulf of Mexico and was later moved to a river in Indonesia. It was towed from there to the Sosiya section of the yard where Ru, standing on the shore with binoculars hanging from his neck and a walkie-talkie in his hand, navigated the two tugs pulling it. “They have cut off the helipad and the two towers underneath. That was quite a view,” he says.

In the past 17 years, Ru has beached a large number of famous and controversial ships, including Exxon Valdez, which spilled oil in Alaska, and the 458-metre-long Seawise Giant, considered the largest ship ever built. Not surprisingly, it took 12 hours to beach and 11 months to dismantle.

Ru earns a fixed amount of Rs 10,000 for each ship he beaches, irrespective of its size, from the Ship Recyclers’ Association. The economic slowdown has been rather good for him. “Ships are like trucks,” he explains. “When there’s cargo to be hauled, they bring good money. But when there’s no trade, they just stand around, and you have to feed the crew, maintain the ship, pay all kinds of fees, including loans. So owners sell them off to scrap, and many of them come here.”

The mainstay of the Alang economy is the annual 400-million-tonne recycled steel. The yard also feeds hundreds of shops on a 10-km stretch of road which sell furniture, antiques, navigation equipment, speed boats, life rafts—almost everything ships carry.

Since tides won’t wait for Ru and his colleague, they have to work hard and sometimes even forgo sleep. Night tides are as valuable as those in the day. Ru does not mind guiding ships past midnight when there are no workers cutting scrap metal on the plots or cranes and trucks shifting material. Just the night, the sea, a ship and silence. Well, sometimes not silence. “I was standing on the shore one cold December night, waiting for the tide to reach its peak. Suddenly, there was this awful noise, jhuk-jhuk-jhuk-jhuk. I pulled my binoculars up and looked out towards the sea, and I saw this ship I was waiting to beach about two nautical miles out, moving in fast towards the shore. Its mast was swaying left and right, like a bottle in water, and making that sound, jhuk-jhuk-jhuk-jhuk. I radioed the captain, and he said two of the four propellers had stopped working, “but no problem”.

“Sometimes these captains... they don’t say anything. Filipinos are wonderful to deal with, they are masters of the sea. The Greeks think they are masters of the sea. Europeans are okay. Chinese are so particular they will ask a thousand questions. And the Russians, they say, ‘no problem, no problem’, and then bam! boom!”

Source: Indian Express. 19 August 2012

Scrapping to Accelerate:

After global financial crisis bombed the market, scrapping has kept increasing.

Analyst Park Mu-Hyun of E*Trade Securities said historically, increase in scrapping has followed after growing newbuilding delivery and shipping market won't be recovered without growth in demolition.

Commercial ships go to scrapping yards in various reasons, such as old ages, old-fashioned technology, rise in steel-plate price, etc. The biggest attraction is outdated vessels, as they consume more fuels with lower efficiency than competing tonnages.

Park said that continued high fuel price pressures ship owners and accelerates aging. Also, imbalance between tonnage demand and supply drops freight rates and even younger vessels become unprofitable.

These all led to increase in demolition and scrapping in 2013 is expected to exceed the overall amount of those scrapped in the last three years.

Also, he analyzed that when tonnage diminishes, demand for fuel-efficient eco-friendly vessel will grow.

Source: E Ship Trading. 17 August 2012

MoEF clarifies Supreme Court ruling, calms rattled Alang shipbreakers

In an apparent end to the uncertainty over the fate of Asia’s largest ship-recycling yard, the Union Ministry of Environment and Forests (MoEF) has clarified that ship-breaking rules framed under the Supreme Court’s orders in 2007 should be followed at Alang-Sosiya and elsewhere, official sources confirmed to The Indian Express. This would clear the air about the last SC verdict that also mentioned following the Basel Convention norms.

Both ship-recyclers and government agencies with jurisdiction over Alang-Sosiya were befuddled with the wording of the SC’s July 30 judgment that allowed the beaching and subsequent dismantling of the controversial Exxon Valdez.

A bench of Justice Altamas Kabir and Justice J Chelameswar had pronounced, “... in all future cases of a similar nature, the concerned authorities shall strictly comply with the norms laid down in the Basel Convention or any other subsequent provisions that may be adopted by the Central government in aid of a clean and pollution free maritime environment, before permitting entry of any vessel suspected to be carrying toxic and hazardous material into Indian territorial waters.”

The Basel Convention is an international treaty on trans-boundary movement of hazardous wastes that has been ratified by India. Its rules on ship-recycling necessitate “prior informed consent”, “a reporting system for ships destined for recycling”and “pre-decontamination”.

Consequently, recyclers at Alang-Sosiya virtually stopped purchasing end-of-life ships. Those that were anchored offshore and waiting to beach were stranded temporarily given apprehensions by officials who wanted to play safe.

One of the recyclers’ main fears was that if Basel and its rule of prior decontamination of ships at the country of origin is to be followed, dead vessels would have to be towed from foreign countries thereby making it either very expensive or next to impossible to import them. On the other hand, the 2007 rules does not make such demands, have been implemented at Alang-Sosiya since they came into force and have not had major impact on business.

Meanwhile, environmental activists remain sceptical and routinely raise the issue of alleged lack of workers’ safety and waste-management systems at the yard. Lately, they have rued the non-implementation of Basel rules.

Source: Indian Express. 22 August 2012

Scrap Metal Services reels in All Star twins:

United States: US recycler Scrap Metal Services (SMS) has acquired Texas-based ship recycling company All Star Metals (ASM) as well as All Star Shredding (AS).

‘The acquisition of ASM and AS will allow SMS the opportunity to expand our scrap service capabilities to our customers in a safe and environmental compliant fashion in a much broader geographic area,’ states SMS’s COO Richard Gertler.

'ASM and AS have ‘one of the highest environmental and safety ratings in the country and mirror SMS’s safety responsibility to its employees and the environment’, he adds.

Mr Gertler believes the acquisition might further refine his company’s response to the needs of its ferrous consumers while also providing a platform for significant growth of SMS’s business in the south west of the USA.

The ship recycling and scrap ventures were founded by Nikhil Shah in 2003. Operating a Newell 98-104 auto shredder, AS has specialised in processing obsolete and industrial scrap, and is capable of producing 180 000 tons of shredded scrap per year.

The acquired businesses are managed by Nikhil, Nirav and Lopa Shah, all of whom have agreed to join SMS’s management team.

For more information, visit: www.scrapmetalservices.com

Source: 23 August 2012

Indian supremacy in shipbreaking put to test:

MUMBAI: The resurgence that one saw in Indian shipbreaking activities could be short-lived as the industry in the region is entering another phase of development, impacted largely by legislative initiatives of local governments as well as by market forces.

Even though the Indian industry could recapture the title it lost to Bangladesh as the largest shipbreaking nation in the world by recycling 415 ships during 2011-12 , it was not a profitable year on record. The industry, with an estimated annual turnover of about Rs 10000 crore, reportedly lost almost Rs 800-1000 crore during the year due to rupee depreciation against US dollar. As the industry is dominated by cash deals, weakening rupee saw industry profits turning into losses, since October 2011.

Source: Economic Times. 27 August 2012

GMS report on Bangladesh shipbreaking industry for WEEK 34 of 2012:

Despite Eid holidays, Bangladeshi buyers still managed to tuck away their share of market vessels with some interesting sales concluded for the week.

The slightly un-fancied bulkers of 7,000 LDT and below (OCEANLIXE I and SAFE RISE) obtained levels of USD 415/LT LDT and USD 511/LT respectively whilst the favored Ukrainian built OKEAX type UNITED (13,755 LDT) achieved a mightily impressive USD 448/LT LDT.

Despite many buyers keen to enjoy their holidays and already stuffed from previously concluded vessels, the number of deals comes as something of a surprise and it wall be interesting to see how the market opens up (and performs) post-Eid.

Source: Steel Guru. 28 August 2012

GMS report on Indian shipbreaking industry for WEEK 34 of 2012:

Some opportunistic moves by keen Sellers saw a huge number of deals concluded for the week into the improving Indian market.

Indeed, no less than EIGHT market vessels were concluded (3 containers and 5 bulkers) as the price was seemingly right for man}' owners to offload their older tonnage.

The price varied drastically from unit to unit though with some perhaps overly optimistic cash buyers hedging their bets ahead of the market. Evidence of such actions are the hugely speculative purchases of the NORTHERN" DIGNITY (14,435 LDT) and NORTHERN'VITALITY (11,106 LDT) for USD 455/LT LDT 'as is' Singapore - with 450 T bunkers and USD 375/LT LDT 'as is' North Germany respectively with min bunkers.

By contrast, a private steel prop bulker of 7,953 LDT achieved a comparatively poor USD 403/LT LDT - showing mat having a keen end buyer in place is at least half the battle in securing a decent price.

Drumming up interest on vessels with poorer specs with so much supply in the market is often difficult with end buyers now able to call the shots on price and type of unit required.

Source: Steel Guru. 28 August 2012

Consultancy-Preparation Of Green Ship Recycling Policy-Gujarat by Sep. 24, 2012:

Consultancy Work for Preparation of Green Ship Recycling Policy to Encourage Ship Recycling Sector in Gujarat

Scope of Work

In order to exploit the natural benefit of 1600 line km long coast line and to meet the demand of steel through green route, Government of Gujarat wants to invite private developers-investors to develop & operate the state of the art of technology for ship recycling facility. The objectives of the Policy are as under:

(a) To make Gujarat as the world leader in safe & environmentally sound ship recycling operations.

(b) To develop & operate all kind of ship recycling \methods to yield the green steel and to reduce load on natural resources.

(c) To attract other industrial players in ship recycling sectors to emerge as ship recycling hub.

(d) To develop the cradle to cradle approach in ship recycling to support secondary coastal ship building and repairing facilities.

(e) To promote the secondary steel making sectors thus to contribute to India’s steel demand.

(f) To boost the recycling and re-use markets along coastal belt of Gujarat.

(g) To optimize the use of the natural resources including precious water front and coastal land.

(h) To utilize water front and land through developing integrated ship building yards having capability for ship recycling.

(i) To promote ship recycling in unutilized water front and back-up land within private port premises.

(j) To contribute to on-going programme of the Government of Gujarat to uplift coastal area development, employment generation and socio economic development of coastal regions.

(k) The consultant will have to prepare documents for Programmes and Plans to achieve the Policy.

Source: NGO Box.

30 August 2012

GMS weekly report on Pakistan shipbreaking industry for WEEK 34 of 2012:

Gadani buyers could only look on enviously to the Indian and Bangladeshi markets as they missed out on the majority of the market vessels vet again.

There are several Pakistan buyers open to take tonnage again but are not perhaps ready to compete on the levels currently on offer in India. The local fundamentals remain strong and we may see some further market moves in the coming weeks as Gadani buyers look to secure their share of the market post Eid holidays.

Source: Steel Guru. 28 August 2012

Shipbreaking and steel sectors: DGI & IIR all set to check tax evasion

SLAMABAD: Directorate General of Intelligence and Investigation Inland Revenue (IR) Federal Board of Revenue (FBR) is all set to check possible tax evasion in shipbreaking and steel sectors after receiving different reports of flouting rules and regulations by these industries.

Sources told Business Recorder here on Monday that the shipbreakers have to give the exact weight age of the ship while filing of goods declaration (GD) during customs clearance process. The agency has received reports that certain shipbreakers declare less quantity/weightage of ships to avoid taxes. If low weightage of a ship has been declared, it would result in less payment of sales tax. The directorate will reconcile the data with the customs department to check whether evasion of tax is taking place in the ship breaking industry.

Similarly, the agency will also verify whether the shipbreaking industry is following the Sales Tax Special Procedure Rules 2007. Shipbreakers have to pay sales tax at the specific rate per metric tonne of re-rollable scrap supplied by them. The quantity of re-rollable scrap shall constitute a certain percentage of the total LDT of the ship imported for breaking. The shipbreakers shall clear their sales tax liabilities in respect of ships weighing up to a certain LDT within four months. While in case of ships weighing more than a specific LDT, sales tax payment has to be made within eight months from the date of filing of GD. The sales tax liability shall be discharged by the ship-breaker either on completion of clearance of goods obtained from breaking of vessel or within the maximum time period allowed.

The agency would also check the tax payments made by the steel industry in view of the provisions of the relevant Chapter applicable to all steel melting, steel re-rolling and ship breaking units. The agency would thoroughly check whether the steel industry is properly paying taxes as per specific provisions of the Sales Tax Special Procedure Rules 2007.

Previously, the agency had shown remarkable performance in detection of cases in beverage and cigarette industries. The directorate had conducted raids on stockiest and wholesalers of non-duty paid or smuggled cigarettes/ tobacco in KPK. The agency had also conducted investigative audit of beverage units. The agency had also issued ‘Red Alerts’ during the Pre-Refund Analysis (PRA) of refund claims in cases where information has been received about suspected claims under new tax policy to combat menace of bogus/dubious refund claims.

Source: Business Recorder. By Imamuddin. 28 August 2012

22 August 2012

GMS report on shipbreaking industry for WEEK 33 of 2012:

Eid holidays started to paint a calmer picture over the international recycling markets this week as both Bangladesh and Pakistan remained virtually closed for business. Indeed, boarding and inspections have all but stopped locally in Chittagong until the conclusion of the religious holidays on August 23rd 2012 (immediately followed by a weekend which meant business purchasing deliveries should resume once again around August 26th 2012 and August 27th 2012).

Meanwhile, plenty of candidates continued to be proposed and several deals were concluded as India continued to surge ahead on levels in order to satisfy a rampant demand. Good vessels that do emerge onto the market will always be highly sought after, and the price often gets pushed up to seemingly unrealistic levels, just to satisfy a particularly eager end buyer.

Having been relatively quiet in the preceding few months due to a struggling currency (which saw some end buyers lose about twenty per cent of the value of their previous purchases), India is now enjoying its moment in the spotlight as deals continue to be tucked away at vastly improved numbers (in comparison to the recent lows).

Lastly, China has been all but anonymous of late with prices stranded over USD 100/LT LDT below their competitors something that will have to change if they are to see any market tonnage any time soon as many candidates continue being directed towards the Indian sub continent.

Even Turkey at this moment is higher than the Chinese market on certain units for the first time perhaps ever! This has helped the Turks conclude a couple of vessels last week, including 7,393 LDT container MV DOLLART TRADER that was concluded to Turkish buyers at an extremely strong USD 350/LT NETT to Sellers.

As owners begin to return from holidays and freight rates show few signs of picking up, it could be a busy end to the year and with all markets firing, who knows, perhaps even a record one.

For week 33 of 2012, GMS demo rankings for the week are as below:

Sentiment Market
USD 425/lt ldt

Source: Steel Guru (sourced from GMS Weekly). 22 August 2012