28 January 2013

Where the voyage ends:

It’s 10.00am. The signal bars on your cell phone screen play hide and seek, the car’s FM radio has been dead for a while with the clanging and banging on iron being the only sounds that reach your ears as you make the bumpy ride towards the shipyards in Gadani.

You suddenly swerve to one side of the road as a truck with a ship’s massive plumbing passes by you. The rusting steel is still hot and steaming from the cutting torch. From the heavy loads being carried on the roads atop trucks, the condition of the road surface is hardly a surprise.

You also cross several small wooden roadside tea stalls with workers in greasy overalls, and protective wielding goggles pulled over their heads or hanging around their necks sipping a cup of tea or a enjoying a humble meal, if the place offers that too.

The stalls are all made of wood scraps from ships. Some doors also have a pothole where there must have been a brass or aluminium window at some point in time before they were used in the stalls. An Iranian and Saudi Arabian flag laid out as shade above a bench or fluttering about on a rickety crooked pole near a tandoor are some of the other remnants put to use.

The oil and rust has turned the soil at the shipyards a deep shade of brown but the water is crystal clear with many seashells washed up on the beach. “We are not into spreading pollution. We are only into ship breaking,” says Dewan Rizwan Farooqui, chairman of the Pakistan Ship Breaker’s Association, who adds that the ships arriving at Gadani have to have a certificate saying that they are free of oil and gas from the port they were last at.

A few workers aboard immediately cut out windows from inside the vessel to allow light inside the hull.

Among the countries involved in shipbreaking, Pakistan stands second only to China. It is doing far better than India, Bangladesh and Turkey. Gadani breaks some 100 ships, be they oil tankers, cargo vessels or luxury cruise liners, having spent some 20 to 25 years in service after which it is more feasible to break it down than repair it. Everything from a little nail to big metal sheets and girdles, can be sold. Thus a 20,000-tonne ship is brought down in around 90 days.

Ship breaking in Gadani began in 1973. The shipbreaking industry saw its peak during the late 1980s and early 1990s in the absence of competitors such as India and Bangladesh. Today China, too, known better for building ships earlier, is breaking them. They have also made plenty of dry docks for the purpose. Meanwhile, Gadani is also more suitable for the purpose than Karachi, where the breaking was done earlier due to its sandy beaches and the water level which is deep near the beaches making it easier for the ships to float as close by as possible. In comparison the beaches in India and Bangladesh are wet and muddy.

Still the business in Pakistan experienced a nosedive between 2002 and 2007 when the international market prices were just too high. It was only in 2008 that the international costs turned around and things started looking up again.

Speaking for all the shipbreakers in the country, the chairman of their association says that they pay around five billion in taxes every year but are not even provided clean drinking water, electricity or good phone service.

The steel from a ship is solid and does not readily rust after it has been sent to factories in Karachi to be re-rolled. Earlier, there were more re-rolling and melting factories in Karachi but now with the breaking down only in Gadani, more of these are coming up in Quetta and Hub besides many more in Punjab as well.

The Pakistan Steel Mill and other foundries, meanwhile, serve as their competitors as they import ore for steel which takes up a major chunk of the country’s foreign exchange.

Source: The Dawn. 6 January 2013

Dawn – On the roll:

About eight to 10 ships per month or a hundred ships per year arrive at Gadani for demolition, most of these from Europe. On an average, 1,500,000 tonnes per year of iron and steel scrap is generated from the ship breaking industry whose total value in terms of money is Rs 6,500 million.

Around 30 ship yards are involved actively in shipbreaking since its revival in 2007 when ships became available at a cheaper rate due to favourable conditions in the international market, after a gap of many years.

The shipbreaking industry is a fully documented sector contributing a major segment of around 25 per cent to the overall steel requirement of the country which is approximately four million tonnes. Around 70.5 per cent of the steel weight yields re-rollable plates for re-rolling mills, whereas 29.5 per cent is scrap including other items in a ship.

“Major buyers of scrap are steel mills and furnaces who buy re-rollable and re-meltable scrap to be used as raw material for production of iron and steel products such as girders, T-Iron, and other building material,” says a shipbreaker at Gadani.

Following a boom, the shipbreaking industry witnessed a downfall in the past. “There are ups and down in any business. The ship breaking industry flourished during 1983-86, followed by a downfall during 1987-2009. From July 2010, the industry gained momentum and the number of ships arriving at Gadani increased.”

According to the chairman Pakistan Steel Re-Rolling Mills Association, Ali Ahmad, the re-rolling industry uses ship plates, not scrap from Gadani shipbreaking yards. Last year approximately one million tonnes of ship plates from shipbreaking were consumed by re-rolling mills throughout Pakistan, at the approximate price of Rs50,000 per tonne — with the total amount becoming Rs50bn per year with the consumption being approximately 85,000 tonnes per month. Out of around 450 re-rolling mills all over Pakistan, around 60 and 17 are situated in Karachi and Hub industrial estate, respectively.

“Scrap is the raw material for furnaces making ingots and continuous casted billets which in turn becomes raw material for the re-rolling industry,” said Ahmed Ali. Anyone making a small house to a mammoth building, a bridge or a dam, is our buyer just like builders, retail shop keepers and house makers. Key players in the steel industry include Amreli Steels, Dewan Steels, Nawab Steels and Razaque Steels.”

Being a major supplier of cheap yet qualitative raw material to the end consumer, the shipbreaking industry plays a significant role for revenue generation for Balochistan.

The industry sells ship plates to re-rolling mills, which is subjected to 3.5 per cent withholding tax. Shipbreakers by law are required to pay one per cent withholding tax at the import stage and 3.5 per cent on local supply. But in reality the industry pays only one per cent tax.

The steel industry also supplies ingots and billets to the re-rolling mills, and pays applicable taxes. Shipbreakers have undue advantage due to non-payment of 3.5 percent withholding tax on supply of ship plates as compared to steel industry. “We are dismantlers and conduct our business without electricity, gas or consumption of basic utilities. We do not produce anything out of ships, only dismantle them in a transportable condition, and contribute major revenue for the government despite unfavourable government policies and red tape which creates an impediment in the smooth flow of business in an already crippled economy,” says a shipbreaker.

Source: shipbreakingplatform. By Aamir Shafaat Khan. 6 January 2013

Press Release – Green Ship Recycling: growing support in EU Parliament for financial mechanism

New study argues an incentive for shipowners is legal, enforceable, and effective

22 January 2013 – Just as the European Parliament is starting to grapple with how a financial mechanism can ensure that green ship recycling takes place globally and in particular with ships controlled by the European Union, a study published today[1]  by the Dutch economic consultancy Profundo argues that such a measure is not only legally defensible but is necessary to ensure the success of any green ship recycling legislation.

The report provides three different alternative models: a fund financed by shipowners through taxes levied at EU ports, a ship life insurance scheme, and a savings account coupled to a transitional fund specifically aimed at financing the recycling of older ships.

The NGO Shipbreaking Platform, a global coalition of 18 environmental, human rights and labour rights organisations promoting clean and safe ship recycling, welcomes the study’s findings and calls on the European Parliament and the Council to include a financial mechanism in order to turn the Commission proposal into an effective instrument to promote responsible ship recycling and to level the playing field globally. The Platform is also releasing today an updated version of its Policy Paper, which contains a detailed argumentation about the objectives and elements that should be included in the financial mechanism [2].

“Every year, more European end-of-life ships containing hazardous materials are sent to India, Bangladesh and Pakistan. Such practices are unacceptable and Europe is in the driver’s seat to put a stop to this on-going human rights and environmental disaster,” says Patrizia Heidegger, Executive Director of the NGO Shipbreaking Platform. “Only a financial mechanism enforced in EU ports can properly internalize costs and close loopholes, which have allowed ships until now to escape legislation and accountability.”

The NGO Shipbreaking Platform argues that any such mechanism must be based on individual producer responsibility and be a strong economic incentive for shipowners to dismantle their end-of-life vessels properly. The financial incentive must meet the following three objectives:

1.   internalize the costs for proper ship recycling and the management of hazardous wastes;
2.   discourage the reflagging of end-of-life vessels to avoid European regulations;
3.   implement an individual shipowner responsibility scheme to encourage the shipping industry to procure green ship design and pre-clean ships during operational use.

The Commission itself discussed the idea of a fund in its Green Paper “On better ship dismantling” and the European Parliament already called on the Commission in 2008 to analyse different possibilities. Unfortunately, the Commission did not include a financial mechanism in its proposal published in March 2012. However, Carl Schlyter MEP, the rapporteur to the Environment Committee in the European Parliament, has suggested a fund financed by fees paid by ships calling at EU ports, which is now being discussed by all political groups.

“It was a grave oversight that the Commission did not use its time and resources prior to publishing its proposal last March in order to thoroughly analyse and propose such a mechanism itself,” says Patrizia Heidegger. “We welcome Carl Schlyter’s initiative as well as other members’ commitment to include an economic incentive for environmentally sound and safe ship recycling into the regulation.”

[1] Download the Profundo study “Financial mechanisms to ensure responsible ship recycling” here: http://bit.ly/10OgPB7
[2] Download the updated Policy Paper here: http://bit.ly/TeEAz5

Patrizia Heidegger
Executive Director
NGO Shipbreaking Platform
+32 (0) 2 6094 419

Source: shipbreaking platform.

Hosco boss calls for acceleration of ship scrapping:

Gao Yanming, chairman of Hebei Ocean Shipping Corporation (Hosco), has sent a letter to Ministry of Transport to call for more policy support to increase the volumes of old local ships being scrapped as well as to improve the level of Port State Control (PSC).

“China should accelerate phasing out old vessels to promote the restructuring of the shipping industry,” Gao said in the letter.

The government should release policies to encourage scrapping old vessels, for example, exempting income tax on scrapping vessels for a certain period, Gao reckons. Also, the ministry should lower the mandatory scrapping age of vessels, Gao said.

Currently the mandatory scrapping age of tankers, bulkers and boxships in China is 31 years, 33 years and 34 years respectively which makes China among the countries with the highest ship ages. Gao, one of the shipping industry’s most vocal champions of scrapping during the downturn, has suggested the scrapping age of bulkers and boxships should be lowered to 27 years, and tankers to 25 years.

In the meantime, Gao, in what might be viewed in international circles as a proctectionist move, has also suggested the government should have stricter regulations on foreign vessels with ages of more than 20 years entering inland rivers and seas to protect the safety and environment of Yangtze River, Pearl River and Bohai Sea.

Source: Sino Ship News. 13 January 2013

Ship, Barge and Oil Rig Recycling: Scrap Metal Services LLC

All Star Metals, LLC (ASM) located in Brownsville, Texas has been operating as a licensed ship recycling, metal processing, and environmental remediation contractor since 2003.

Our facility has the ability to ship and receive material by bulk cargo vessels, barge and rail.

With a limited number of licensed and approved ship recyclers in the United States, ASM is a leading provider of ship recycling services to the United States’ government, the U.S. Maritime Administration (MARAD) and commercial barge and vessel owners. The company’s size and dominance in the recycling and remediation field is reflected by its ability to complete jobs in a timely manner. The company has also achieved the highest environmental and safety rating in the country designated by the EPA and OSHA.

Many organizations have recognized ASM for providing recycling services in a cost efficient, safe, and environmental friendly manner. ASM was a 2012 finalist for the American Metal Market Scrap Company of the year. It’s no one wonder others refer to ASM as a “World Class Recycling Facility.”

All Star Metals, LLC is a subsidiary of Scrap Metal Services, LLC, which operate full-service scrap processing and steel mill scrap management facilities throughout the United States.

Visit All Star Metals: www.allstarmetals.com

Visit All Star Shredding: www.allstarshreddingllc.com

Source: scrap metal services

Call for ship scrapping support in China:

'China should accelerate phasing out old vessels to promote the restructuring of the shipping industry,' the Chairman of Hebei Ocean Shipping Corporation (Hosco), Gao Yanming, has urged in a letter to the country's Ministry of Transport.

According to SinoShipNews, the Hosco Chairman called for more policy support to increase the number of old ships being scrapped; he also underlined that the level of Port State Control (PSC) is in need of improvement. Mr Gao said the first could be achieved by income tax exemption on scrapping vessels for a certain period. Lowering the mandatory scrapping age of vessels would also help encourage the scrapping of old vessels, he argued.

At present, China operates a system of mandatory scrapping ages for tankers, bulkers and boxships of, respectively, 31, 33 and 34 years. According to Mr Gao, these place China towards the top end in terms of ship ages allowed across the world. Therefore, he added, China would do well to lower the scrapping age for bulkers and boxships to 27 years, and for tankers to 25 years.

Mr Gao also argued that China would benefit from implementing stricter regulations on foreign vessels that are over 20 years old.

For more information, visit: www.hoscogroup.com

Source: recycling international. 17 January 2013



This time last year markets sitting perky, aggressive buyers and high prices. What happened next was expected by many but predicted precisely by few. We all saw low 330 levels in june/july.

Yet again the demo world finds itself in midst of a pseudo boom. Prices, especially for containers are crossing the usd 450 mark easily on delivered basis. Bulkers are trading aggressively in Chittagong, which seems to be back overcoming all the financial troubles. China has begun the year with the most aggressive purchases ever recorded in its history.

But lets not get ahead of ourselves, what goes up must come down! All delivery locations despite different financial and economical demographics have one thing in common; “SPACE”. India is running on full, there is a limit to the number of ships a breaker can beach one behind the other. Pakistan is Full, picking and choosing tonnage of choice. By the end of the month, Bangladesh too will be reaching capacity.

Oversupply is still very much evident and will remain a big factor for the entire year. Local steel prices have not moved much and the INR-dollar exchange has not improved.

There are no real factors in the market to sustain such high prices.

Only real factor is competition, its battle royal out there! Many new cashbuyers have to the field and at times only priority being securing tonnage, no matter the price or promise of performance.

Many of the marquee sales over the last week have failed, some owners are waiting for deposit for more than 10 days. Some already in re-negotiation.

This is the nature of business; it is a natural filtration process. Where the strong with grounded core values of delivery and performance will survive.

Source: Star Matrix. 11 January 2013

22 January 2013

GMS weekly report on Chinese shipbreaking industry for WEEK 03 of 2013:

With the Chinese market still in full swing before the onset of the New Year holidays, it was unsurprising to see several more units concluded into China this week. Many vessels have gone direct from Chinese owners into local vards with little more than a casual or cursory check on the sub-continent market (and even then with little serious intent to bring vessels over).

Those units discharging in China or the Far East, are seeing far more bang for their buck on the demo prices at present - something that is seeing the Bangladeshi market in particular, lose out on tonnage.

Whether this trend continues after the Chinese New Year holidays in mid-February remains to be seen, when yards will have to renew licenses at that time and have a whole new quota of vessels to fulfill.

The Japanese owned PCC ASIAN SPIRIT (15,578 LDT) was concluded for USD 410/LT LDT into North China this week for guaranteed green recycling.

Source: Steel Guru. 22 January 2013

16 January 2013

GMS report on Chinese shipbreaking industry for WEEK 02 of 2013:

Bangladesh frustration was China's gain this week as several decent sized units were concluded to local yards tor pre Chinese New Year deliveries, at levels up to and even beyond 400/LT LDT.

With many yards set to renew licenses and fulfill designated quotas within this year, the rush is on to stock up before the two week holidays commence in early February -something that has seen speculation push on to levels, in some cases even beyond what the Pakistani market has to offer

The one market sale for the week concerned that of the younger (built 1998 in South Korea) higher LDT woodchip carrier LARCH 1 (11,385 LDT), sold 'as is' under tow in China for a price region USD 390/LT LDT. The concerned yard in the North of China will actually employ their own tug to bring the vessel over from its current location near Shanghai.

Source: Steel Guru. 16 January 2013

13 January 2013

Fire breaks out at Alang shipbreaking yard:

RAJKOT: A fire broke out in plot number 48 at Asia's largest ship breaking yard at Alang in Bhavnagar district on Sunday evening.

P D Vyas, fire officer of Alang fire station, said fire brigade personnel had extinguished the fire in the cabin of an anchored ship. The reason as to what had caused the fire is being investigated.

There was no report of any casualty. Six labourers had died in a major fire that broke out at the ship yard in October, 2012.

Source: times of india. 13 January 2013

12 January 2013

India achieves all-time shipbreaking high:

India: Shipbreaking yards in India broke all previous records in dismantling well over 500 vessels last year, according to experts at Star Matrix.

It states in a report published in late 2012: 'India makes history in terms of maximum number of ships beached this year, with 527 vessels making an average of 1.4 ships beached per day. With 5.2 million tonnes being recycled from ships, ship recycling in India contributed to 9% of total steel manufactured in India.' Furthermore, 52 ships were reported as arriving at the Alang shipbreaking hub during the final week of 2012.

Though optimism characterised the sector in Bangladesh towards the end of last year, more movements and bigger vessels are expected by mid-January 2013, remarks Star Matrix. And it adds that China's demolition market 'has again geared up with a little influx in price' - a development which subsequently 'opened doors' for ship owners to benefit from competitive offers from markets in India, Pakistan and Bangladesh, as well as China.

The demolition experts have also shared a theory as to why ships in the 1000 to 6500 ldt range generally command lower rates, arguing that they typically make their end-of-life voyage to Mumbai ship recycling yards, resulting in a complete change in shipbreaking estimations and costing.

As opposed to the Alang yards, Mumbai boasts some 12-15 breaking plots which are all operated on a rental basis, thus putting breakers 'at the mercy of Bombay port trust for the permissions and the approvals of breaking a particular ship'. Mumbai has been breaking some 60 small ships a year, according to Star Matrix.

Source: recycling international.  7 January 2013

02 January 2013

Press Release – Shipbreaking still causes deaths, accidents and illnesses:

At least 15 workers died in 2012 on or around end-of-life ships that were beached in Bangladesh for breaking, according to data gathered by the NGO Shipbreaking Platform, a global coalition of 18 human rights, labour rights and environmental organisations. Every year, shipbreaking workers in Chittagong, Bangladesh, honour the people who died while working on the dismantling of end-of-life ships by holding a candle ceremony attended by the workers, their families, trade unions and local NGOs.

One of the honoured workers is 16-year-old Khorshed Alam, who was crushed to death on July 17 when a metal plate fell on him. The boy had left school to start working in the yards and support his family. He worked a 12-hour night shift at the SRS shipbreaking yard in Chittagong for 25 USD cents an hour, or just under 3 USD per day. Last year, 15 shipbreaking workers had died in Bangladesh, while 12 died in 2010.

“The causes of accidents in the yards are manyfold: the lack of workers‘ training, the absence of Personal Protective Equipment (PPE), the lack of skilled supervisors such as marine engineers, the risky manual process of cutting and loading, the lack of compliance with and respect of the law, and the beaching method,“ says Muhammad Ali Shahin, the Platform’s Project coordinator in Bangladesh. “Only by enforcing the law on workers safety and by pre-cleaning ships will we move shipbreaking away from the beaches and prevent these dramatic deaths.“

The real number of casualties and severe accidents is unknown as the incidents are not documented properly. Also, later illnesses and deaths caused by the exposure to toxics are even more difficult to track as workers are often not registered and migrate within the country.

With India and Pakistan, Bangladesh is home to one of the world’s largest and most dangerous shipbreaking industries. Every year, out of about 1,000 ocean-going ships sold for recycling, 70% end up on the beaches of South Asia, where they are cut by thousands of poorly trained and equipped workers using blow torches. Shipbreaking workers are exposed daily to toxic fumes, the risk of falling from the ship or being crushed by a falling plate. In 2011, the government of Bangladesh closed the beaches of Chittagong for a few months following a series of deadly accidents.

“Shipbreaking remains one of the most dangerous jobs worldwide,” says Patrizia Heidegger, Executive Director of the NGO Shipbreaking Platform, “even if there have been some slight improvements on the ground, the number of deaths, accidents and illnesses in the shipbreaking yards remains alarmingly high. We call upon the shipowning and the shipbreaking countries to make these jobs safe and clean, both for the workers and the environment.”

The NGO Shipbreaking Platform is currently working with the European Parliament and the European Council to strengthen an upcoming EU regulation on ship recycling. About 40% of the world’s commercial fleet is owned by EU-based shipowners, therefore making the EU an important player to bring change to the shipbreaking issue.

Muhammad Ali Shahin
Project Coordinator
shahinhelpsgreen@gmail.com; +88 01819535319

Delphine Reuter
Communication Officer

Source: shipbreaking platform.