India: A decline in the fortunes of the
global shipping industry has boosted Indian shipbreakers in Alang despite stiff
competition from Pakistan, Bangladesh and China. With freight rates dropping
98% in less than six months, Alang is expected to exceed the figure of 435
ships dismantled in 2011-12.
'Last year, over 40 million deadweight
tonnage (DWT) was scrapped,' says Daniel Chopra, managing director of Doehle
Danautic India. 'Nearly 55 million DWT of the global tonnage will be sold this
year. This will yield approximately 15 million tons of steel.' He suspects that
countries like Bangladesh will meet half their steel demand from the scrap
industry. 'We expect that the demolition business will peak this year and
continue to be good until 2015,' he adds.
Manish Gupta, head of industry agency
Crisil Ratings, observes: '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.'
According to Gupta, around 55 million of
the 180 million gross tonnage of global shipping capacity that is over 20 years
old will be scrapped in the next two years.
Recent data from the Ship Recycling
Industries Association reckons the Alang hub is worth some US$ 2 billion per
year in turnover terms and employs some 50 000 workers.
For more information, visit: www.doehledanautic.com
Source: recycling
international. 5 April 2013
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