28 August 2013

Swansea Drydocks ship scrapping firm creates 25 jobs:

Up to 25 jobs will be created when a Royal Navy ship is brought to Swansea to be scrapped.

HMS Cornwall, which is moored at Portsmouth Harbour, has been bought by recycling firm Swansea Drydocks.

It is one of four decommissioned frigates sold in July by the Ministry of Defence raising up to £3m with the other three bought by a Turkish firm.

The two companies will recycle as many parts of the former Devonport-based ships as possible.

HMS Cornwall was decommissioned in 2011 and will arrive in Swansea later this year with the project due for completion in early 2014.

Swansea Drydocks was granted a permit change in April to expand its operation allowing it to extend the area where it dismantles ships to include a "wet berth".

It will temporarily store old vessels to start stripping fixtures and fittings and remove waste fuel.

HMS Cornwall will be the first ship to be stored here.

Source: BBC. 27 August 2013

Frontline Urges Scrapping of Tankers Aged Over 15 Amid Ship Glut:

Frontline Ltd. (FRO), the oil-tanker company led by billionaire John Fredriksen, urged shipowners to scrap crude carriers that are more than 15 years old to help reduce an excess of the vessels.

Unless the market improves, Frontline is unlikely to make the investment required to keep two tankers in service before a special survey of the vessels scheduled for this year, the Oslo-based company said in a statement today. Frontline also reported its fifth straight quarterly net loss. The stock declined as much as 11 percent in Oslo trading.

The tanker market is “massively oversupplied,” said Frontline, which split in two in December 2011 to avoid running out of cash amid the lowest rates since 1999. Ships are losing $1,795 a day on the benchmark Saudi Arabia-to-Japan voyage, according to the Baltic Exchange in London. Still, speculation about a rebound may deter owners from demolishing older vessels, said Dag Kilen, an analyst at Fearnley Consultants A/S in Oslo.

“We expect a recovery in the market by 2015, so if you have tankers aged 15 by the turn of 2014, you will wait before scrapping,” he said today by phone. Demolition of vessels aged above 15 years “is more something that Frontline hopes for,” Kilen said.

Vessels are required by so-called classification societies that oversee industry safety and standards to undergo a special survey every five years for a check of elements including structure, according to London-based shipbroker ICAP Shipping International Ltd.

“If similar decisions are taken by other owners, it is likely to reduce the oversupply in the tanker market,” Frontline said after opting against investing in the two ships.

Shares Drop
Frontline fell 9.2 percent to 15.70 kroner by 12:05 p.m. in Oslo trading, reducing the company’s market value to 1.23 billion kroner ($204.2 million). The stock is down 15 percent this year, rebounding from a slump of as much as 46 percent at the 2013 low in May.

The net loss widened to $120.3 million, or $1.54 a share, in the second quarter from $24.3 million, or 31 cents, a year earlier, the statement showed. Revenue dropped 26 percent to $121.2 million.

Frontline said its very large crude carriers need a daily return of about $25,000 for the rest of 2013 to break even in terms of average total cash costs. Each of the ships can hold 2 million barrels of oil. Suezmax ships carrying half as much cargo need $19,000 a day, the company said.

Source: Business Week. 28 August 2013

27 August 2013

GMS weekly report on Bangladesh ship breaking industry for WEEK 34 of 2013:

As the Bangladeshi strike rumbled on (and is set to continue until the 30th of August), little new in the way of ship sales has occurred locally this week. Indeed, most end buyers seemed determined to grab onto the coat tails of the misery currently afflicting the Pakistan and Indian markets offering mindless levels in the hopes of snagging a cheap ship.

Whilst the steel prices have slumped alarmingly in the last month or so (hence the reason for the strike), this has become almost tradition at this time of year in Bangladesh, due to ongoing holidays and monsoon season, that usually results in end buyers picking up a cheaper vessel or two.

The market has almost always recovered going into the fourth quarter of the year as demand and steel prices have historically picked up. Whilst that may not be a certainty this year due to the ongoing crisis concerning the Indian and Pakistani currencies (something that has vet to affect the Bangladeshi Taka), many in the industry are far more optimistic on some form of recovery in the coming month or so.

Source: steel guru. 27 August 2013

GMS weekly report on Indian ship breaking industry for WEEK 34 of 2013:

Unwanted records continue to be set as the Indian Rupee persists in its merciless descent into oblivion against the US Dollar. The single biggest depreciation in one day tor over a decade has come forth, resulting in the Rupee hitting a historical low of INR 65.54.

Fears that a potentially inevitable INR 70 against the USD is not too far from the horizon and has resulted in a virtual halt to the local buying, leaving end buyers paralyzed with fear, panic, and confusion, amidst calls for governmental intervention to halt the alarming slump.

Meanwhile, as cash buyer vessels continue to arrive, renegotiations on the shorefront are rife and losses for all concerned are hefty. Indeed, for those cash buyers with unsold inventory, arriving in India is almost the nightmare scenario with a market shifting downwards by the day, losses racking up on vessels the longer they remain unsold, and an increasingly minimal interest to buy becoming a daily norm.

Local steel plate prices also remain in a state of fluctuation that leaves little confidence for local players to make any sense of, and peg any discernible levels, for vessels on offer.

It was therefore no surprise to see no market sales for the week being concluded and it may be quite some time before confidence returns, bringing local buyers back to the bidding tables.

Resultantly, we may well see more than one yard filing for bankruptcy, if this Indian recession continues.

Source: steel guru. 27 August 2013

GMS weekly report on ship breaking industry for WEEK 34 of 2013:

As headlines hit across the world of an Indian Rupee in free-fall, panic set in across the ship recycling industry with end buyers back-trading on offers or withdrawing numbers entirely altogether.

While it has been a tempestuous past few months, this week topped all that has gone before. The Indian Rupee suffered its single largest one day depreciation in more than a decade, as a historical low of INR 65.54 against the US Dollar was breached. The rollercoaster did not end there as the week ended with the currency back down at INR 63.41.

Chaos ensued on the waterfront with all concerned expecting another major correction in ship prices. Pakistan as they so often do followed suit, as their currency also suffered worrying and unprecedented reversals against the US Dollar.

Bangladesh similarly suffered hefty drop in levels, albeit in local steel plate prices, one that has seen almost USD 25/LT LDT knocked off the values of ships in little over a month. Local buyers have rallied together in protest, ceasing resale of ship's steel into the domestic steel market at least until August 30th, until some sort of upswing on the prices is seen.

For a brief time, there was a deathly silence across the industry with end buyers reluctant to open their mouths on offers, as rumors swept through on deals being negotiated (or renegotiated) at rock bottom levels.

The truth is that very few Sellers are willing to do deals at today's levels. Even cash buyers are holding on to hopes of better days. The end of monsoon season is just around the corner, Ramadan, Eid and all the resulting holidays have been and gone, and there is traditionally much more optimism going into an often bullish fourth quarter of the year - unfortunately reality is a far cry from the traditional August up-swing.

If the China market is anything to go by and it usually is a chief indicator of tilings to come - then some hope of recovery may be on the horizon. Those in the industry can only hope that the darkest days of this year are over.

For week 34 of 2013, GMS demo rankings for the week are as below:

Market Sentiment
USD 365/lt ldt
USD 400/lt ldt
USD 365/ltldt
USD 400/ltldt
USD 360/lt ldt
USD 390/Lt ldt
USD 340/lt ldt
USD 350/lt ldt

Source: steel guru. 27 August 2013

GMS weekly report on Pakistan shipbreaking industry for WEEK 34 of 2013:

As the Indian rupee continued to wreak havoc, so too did Pakistan struggle with its own currency as it reached a historical low of PKR 103.85 to the US Dollar a depreciation of almost 2% since last week.

Gadani end buyers started to scale back their offers some choosing not to offer at all as a certain panic began to descend on the market.

It was therefore with some surprise, that news emerged of the Ukrainian controlled VLOC MAXI BRAZIL being sold for a firm USD 403/LT LDT. Whilst larger units are favored above all else in Pakistan, anything excess 400/LT LDT on today’s market seems extremely wishful thinking indeed.

Source: steel guru. 27 August 2013

Beaching method of ship recycling could get Class certification:

Few ship breaking yards at Alang are heading for class certification in compliance with the Hong Kong International Convention

The ship recycling facility to Jiangmen Zhongxin Shipbreaking & Steel Co., Ltd in China may be the only yard at present to have the Statement of Compliance (SOC) in the world. But in all probability few yards based at Alang on the West coast of India where ship breaking is by the beaching method, are vying for SOC and are likely to follow suit soon. ClassNK which had issued the world’s first SOC to the Chinese ship breaking yard is carrying out a gap analysis of these Indian ship recycling yards presently.

Prior to the adoption of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 there was some opposition to the beaching method which prevails in Alang, the world biggest ship breaking facility. Considered much economical and faster method of recycling ships besides its many advantages, some European countries had opposed it initially because it caused some degree of pollution and in some cases hazardous material gets left behind while beaching and which gets washed into the sea.  

A.V. Pradhan, Regional Manager of ClassNK points out that the beaching method followed at Alang cannot necessarily be said as ‘not an approval method’. Also it cannot be said to be bad process of ship recycling as long as they are able to take care of the pollution. He informed that ClassNK has its inspectors at the site undertaking gap analysis. He felt that certain procedures are required to be put in place before a SOC can be issued.

Tributyltin or TBT is a biocide which came into being in the 1970s’ because of its brilliant anti fouling properties over ship’s hull as it prevents the growth of algae, barnacles and other marine organisms that cause the vessels’ weight to increase and cause a drag while moving in water. But because of its harmful effect TBT was phased out of use from 1st Jan 2008. But in order to implement the ban the TBT is either removed during dry docking by ballasting which is costly or by putting a sealer coat on top of this TBT approved anti fouling paint used. But in the beaching method the TBT from the underside of the ship comes off on to the sand and often remains there until the ship demolition is completed and TBT absorbed / washed back into sea when the tide comes in.

“One of the main reasons for the opposition to the beaching method is the pollution caused by the TBT which comes off and remains on the beach,” says Mr. Pradhan. “If all such pollutions are prevented, the banned material properly disposed off without spilling on to the beaches and all the requirements of the Hong Kong convention are complied with then the beaching method could be made acceptable for ship breaking.”

It is all a question of having to put a system in place which involves not only creating awareness about the need for having a technique to identify various hazardous material, use of the right procedure in handling and segregating the material and undertaking storage if required and its proper disposal all the ship breaking activities must be documented and carried out safely.

“But most importantly there is a need to have a change of attitude,” says Mr. Pradhan. “The ship breakers are not aware of the pollution that is happening during ship breaking because of the traditional approach which was subjected to indifferent style of functioning. It is necessary to dissuade workers from randomly throwing out hazardous and useless material and instead have it properly dispose off. According to the procedure to be put in place workers will have to remove all material that remains on the beach. They will have to train people in being able to identify hazardous material and implement the system. “

To carry out the certification process studies are being conducted on method followed for grant of SOC to Jiangmen Zhongxin Shipbreaking & Steel Co., as well as another in Turkey. 

Jiangmen Zhongxin Shipbreaking & Steel Co. is the largest ship recycler in China with a yard of over 400,000 sq meters in area has a capacity of only 500,000 light dead weight tons (LDT). However, the yard has been a pioneer in green ship recycling and has earned recognition as a “AAAA” level green ship breaking enterprise from the China National Ship Recycling Association. After a thorough review of the ship recycling facility plan (SRFP) developed by the yard with the assistance of Wilhelmsen Ship Management, ClassNK working as a third party certification body confirmed that the recycling practices of the yard were in compliance with the Hong Kong Convention, and issued the world’s first SOC. The ship recycling yard at Turkey is said to comply with the requirements of the European convention.

Sourcemaritime professional. 26 August 2013.

23 August 2013

8th Annual Ship Recycling Conference: 26 - 27 September 2013

Ship Recycling Conference: 26 - 27 September 2013, Le Meridien, Piccadilly, London

Implementing & Clarifying Inventories of Hazardous Materials Workshop: 25 September 2013

Commercial, environmental and regulatory implications of ship recycling today

Programme highlights include:
  • Global Yard Update from Dalian Shipbuilding Industry and Ship Recycling Industries Association INDIA
  • European Parliament Update on the future of ship recycling
  • IMO on barriers to overcome when implementing the Hong Kong Convention

Unique array of perspectives:
  • Global market and regional analysis – Crunching the numbers and forecasting tonnage, supply and the future for traditional ship recycling nations
  • Recognising new business roles and relationships within ship recycling
  • Strategies for combining green regulation with cost effective ship recycling in a multi-speaker panel discussion

Speakers include:
  • Dr. Nikos Mikelis, Non–Executive Director, GMS & Director, Mikelis Consulting
  • Karolina D'Cunha, Team Leader, Waste Framework Directive and Implementation, European Commission
  • Gao Feng, Vice General Manager, Dalian Shipbuilding Industry Ship Recycling Co.
  • Simone Leyers, Associate Programme Officer, Marine Environment Division, IMO
  • Henning Gramann, Director, GREEN SHIP RECYCLING SERVICES

Ship Recycling highlights:
  • Gain shipowner insight into the true cost of responsible recycling
  • European Commission reveal the latest developments in European ship recycling regulation
  • Discover what ship recycling yards in Southern Asia are doing to achieve Hong Kong Convention compliance
  • Receive tonnage, supply and market analysis to prepare for the future of ship recycling


EC Adopts Ship Recycling Regulations:

Policy will not restrict ships from being recycled in developing countries.

According to published reports, the European Council has adopted regulations on ship recycling operations that seek to make the operation safer. However, the regulation does not prevent ships from being recycled on South Asia beaches.

"There is no specific mention that beaching is banned. But the standards agreed to will exempt South Asia yards from the list [at which] European flag ships can be recycled," said Carl Schlyter, of Sweden's Green Party, who spearheaded the European Parliament's push for stricter recycling practices.

The European Council, which represents the heads of European Union member states, opposed a ban on beaching amid pressure from South Asian governments.

EC officials say the new regulation encourages shipyards in India, Bangladesh and Pakistan to improve their methods to avoid toxic spills. But they don't expect European vessels will stop using South Asia recycling yards.

The three South Asian countries account for more than 70 percent of the global ship-recycling industry. Yards in those countries pay ship owners $410 for a ton of steel, depending on the grade, while competitors in China and Turkey pay $300 to $340 a ton.

The legislation calls for recycling to be conducted using fixed structures, impermeable floors and effective drainage systems to prevent spills. But it doesn't propose specific penalties on shipowners for recycling their vessels at yards that don't have such facilities.

The EU legislation is in line with an existing global proposal—the 2009 Hong Kong Convention—that regulates the scrapping industry by establishing standards that are safe for workers and environmentally sound. That agreement awaits ratification by national parliaments, which is expected to take about 6 years.

The EU measure "is reasonable and workable and very much in line with Hong Kong Convention, which is the only route to global regulation for ship recycling," says Nikos Mikelis, a nonexecutive director of Global Marketing Systems, a middleman in the ship-breaking industry. Mikelis, a former executive of the United Nations' International Maritime Organization, helped draft the convention.

According to the EC, in the future, EU ships will have to be dismantled in ship recycling facilities that are included in an EU list of those that meet specific requirements and are certified and regularly inspected.

"This new legislation finally puts an end to European ships being recklessly scrapped in developing countries. Currently, most EU ships are sent to Southeast Asia at the end of their lives, where they are scrapped on a beach in conditions that are unacceptable for human health and cause gross pollution of the environment" said Carl Schlyter (Greens/EFA, SV), who steered the legislation through Parliament. The agreement he negotiated with Council was approved with 58 votes in favor, 5 against and 1 abstention.

"I want to stress that this is not an attack against India, Bangladesh or Pakistan—the countries that currently practice beaching—but against the dangerous and highly-polluting practice of beaching. This regulation incentivizes these countries to make the necessary investments in proper ship recycling facilities, above all for the sake of safe and environmentally-sound jobs in their countries," he added.

In negotiations on the draft, Parliament strengthened the requirements for ship recycling facilities to clearly preclude the practice of beaching. Ship recycling facilities must inter alia operate from built structures, be designed, constructed and operated in a safe and environmentally sound manner, contain hazardous materials throughout the recycling process and handle them and their waste only on impermeable floors with effective drainage. Waste quantities must be documented, and waste processed in authorized waste treatment or recycling facilities.

Source: Recycling Today. 22 August 2013

Blue Ocean wants to recycle, not break, region’s derelict vessels:

ASTORIA — The term shipbreaking, a common term used for dismantling ships, scrapping and selling their metal and other usable components, sticks in the craw of Frank Allen, the organizer behind Blue Ocean Environmental and its proposal to dismantle vessels at the Port of Astoria’s North Tongue Point facility.

His proposed operation, he said, isn’t haphazardly breaking but methodically cleaning and recycling; it’s sticking to vessels less than 200 tons – boats instead of ships – for the foreseeable future; and it isn’t trying to do anything in the water, an environmentally concerning practice found in places like Brownsville, Texas, but illegal in Oregon.

During a public presentation and forum Thursday, July 25, at the old Port of Astoria offices, Allen told the sparse audience of eight how he wants to start a trial run with a 40-foot vessel languishing at North Tongue Point, then stop and see what the community thinks, holding an additional community forum.

Cleaning, then dismantling

“I couldn’t think of a more benign way to do this than fix a problem then stop,” said Allen of the derelict 40-foot fishing vessel Cap’n Oscar, owned by the Port and languishing alongside Pier 2 at North Tongue Point.

Allen, whose main business is internationally trading seafood through his company Live Online Seafood, wants to bring in an expert demolition team from New York he’s worked with before as a commercial and industrial contractor on the East Coast.

He’d also hire some locals to start teaching them the process. If the operation continues, he said, it will eventually need a homegrown workforce, possibly including training opportunities at Tongue Point Job Corps Center and Clatsop Community College.

His crew from New York would take the vessel onto the docks on a dolly with welding supports on the sides to keep it erect.

“What’s different with the other operations is they go for the scrapping first,” said Allen. “We’re going to go in and clean it up first, then we’re going to scrap it out.”

All usable, working parts would be salvaged and sold whole. Then they would proceed with scrapping and dismantling. The metal would be barged to Seattle to steel firm Nucor Corp. (www.nucor.com), which would reprocess it for use in the U.S.

His crew from the East Coast, he added, has used the same method on two barges in New York.

After checking with Job Corps, Allen said his operation hours wouldn’t extend beyond their’s, between 6 a.m. and 9 p.m.

“I want to make sure you finish the job and make it broom clean,” said Leon Jackson, adding that the Port should hold a bond until the first vessel is completely done with. Jackson came to learn more of the operation, he said, after reading mostly negative and contradictory coverage in The Daily Astorian.

“We can bond up to $10 million right now,” said Allen, adding that the Port has asked for a deposit. There is no agreement yet in place between the Port and Blue Ocean.

Allen and Port staff lamented previously over not being able to work inside the western portion of Hangar 3 that previously housed the evicted Pacific Expedition yacht-building company. The city’s building inspector said it needed to undergo significant improvements. It was hoped that doing it indoors would eliminate many of the environmental hazards, and Allen offered to clean the portion of the building, left with fiberglass debris on the inside, before starting.

But the door hasn’t closed on using Hangar 3 yet, said Port CEOHank Bynaker, who’s been meeting with city officials to see what can be done to make the structure suitable for the operation.

Allen, who said he has to hire engineers to ensure Hangar 3 will be suitable, hopes to start work on the Cap’n Oscar within a month, adding that the cleaning, scrapping and dismantling process should take about a week. Then the review by the Port and the general public would begin.

Keeping track

Lori Durheim, a regular watchdog of Port operations, asked who monitors Blue Ocean’s activities. Allen said the Department of Environmental Quality in Oregon and the Washington Department of Ecology monitor, adding that he’s likely to get lots of attention during the first vessel work from both environmental and governmental organizations.

“It’s in our best interest to do well by them,” said Allen. “We have to get contracts from them. We want to be on their preferred vendor list.”

He keeps a watch list of substances like asbestos and PCBs, adding that old inventory left in the boat often poses the biggest hazard.

“We’re trying to get registered as a green ship recycling facility,” he said of his operation, disassociating it from the haphazard shipbreaking yards of Alang, India, Brownsville and others where vessels are simply run aground and torn apart with little environmental or safety concerns.

Nongovernmental organizations (NGOs) such as Seattle-based Basel Action Network and Greenpeace created the Green Ship Recycling Standard in 2008 through their joint organization, the NGO Platform on Shipbreaking. It seeks “to establish an environmentally sound management and methodology in shipbreaking and recycling of ships.”

Referring to instances such as the $20-million cleanup of the sunken Davy Crockett in Camas, Wash., and the $5.4-million cleanup of the fire-gutted and sunken Deep Sea in Seattle, Allen said his operation is trying to be proactive.

Starting as a money-loser

Leon Jackson asked about the owners of boats.

“There’s 300 to 400 vessels like this in Washington and in Oregon that are abandoned and sinking in the river,” said Allen, adding that owners will often buy moorage in a marina or Port before leaving them.

Jackson asked Allen how much the Cap’n Oscar will cost to dismantle. Allen said it would likely take $20,000 out of his pocket, but he’d continue doing small vessels for proof of his method’s merits if needed. The operation can turn a profit, he said, once he can get the vessels in place for free from the public or private entities trying to dispose of them.

Ted Thomas, another regular meeting attendee, asked Allen if he had thought about connecting rail to ship metal from Tongue Point.

“That’s down the road,” said Allen, who would like to gradually increase the size of vessels over time. “We need to prove that we can do this one first.”

There’s no set timeline for when Blue Ocean could start and no agreement with the Port.

Source: Coast River Business Journal. 22 August 2011

Irving shipyard to lay off workers as upgrades, demolition begins this fall:

HALIFAX - Irving will sink $300 million into upgrades that will make the Halifax Shipyard the “most modern shipyard in North America,”   according to company officials, but which come at the cost of layoffs for some.

Demolition of some structures in the shipyard’s north end has already begun, and the upgrades are scheduled to be complete in time for work to begin on the first set of ships ordered under a lucrative federal contract.

Scott Jamieson, vice-president of programs at the shipyard, revealed Wednesday morning that layoffs are expected by September as the shipyard wraps up work on a mid-life refit of patrol vessels.

Jamieson said that Irving is hoping to mitigate the layoffs through commercial contracts, and says the job cuts are necessary to proceed with the construction of new facilities.

He couldn’t give the number of employees to be laid off, but says a number of trades will be affected.

The company hopes some workers will be recalled when work on six to eight Arctic patrol vessels begins in 2015, Jamieson said.

Irving got a $260 million loan from the provincial government in March 2012 to assist with the shipyard’s upgrades.

They include the building of an assault hall and painting facilities.

Source: The News. By Ruth Davenport. 21 August 2013

22 August 2013

GMS weekly report on Pakistan ship breaking industry for WEEK 33 of 2013:

As both competing sub continent markets struggled to maintain any sort of form / consistency post Eid, so too did Pakistan struggle to muster any meaningful numbers / offers to induce owners to sell any units.

A far more specialized market anyway there was no redirecting India bound tonnage such as reefers, roros, containers, smaller general cargo units and the like. Always ones for larger dry bulk vessels and tankers over 10,000 LDT gas free for man entry, few of their favored units have yet to be proposed.

However, there is still a question mark over whether end buyers would present suitable offers even if the right vessels were put in front of them the Pakistan tendency has been to hang onto the coat tails of their Indian sub continent neighbors.

Source: steel guru. 20 August 2013

Weak steel demand hits Alang yard:

RAJKOT: Ship-breakers in Alang, the biggest ship-breaking yard in Asia, are facing a queer situation. On one hand, their business is booming due to large number of vessels coming for dismantling, while on the other the slowdown in construction sector has resulted in a massive pile-up of steel in the rerolling mills.

The re-rolling mills in Bhavnagar and Sihore that make steel bars and ingots from the dismantled vessel are seeing material piling up in their units.

The demand for steel has plummeted drastically as major infrastructure projects are on hold. Close to 60 lakh tonnes of steel is produced in rolling mills.

This has forced the ship-breakers to shut down the yard on Saturdays and work just six days a week. "In order to avoid overproduction, we have decided to shut down the yard for one day every week at Alang. We have also cut down daily working hours of labourers," president of Sosiya Ship-breakers Association and vice-president of Ship Recycling Association of India Ramesh Mendapara said.

Mendapara said that the rolling mills which purchase steels from ship breakers have decided to shut down their units twice a week. They have also cut down on procurement of materials from ship breakers.

A ship-breaker in Alang Haresh Parmar said, "Vigorous monsoon throughout the country has also affected the transportation of steel as compared to previous years. We have limited space on our plots to store all material extracted from ship-recycling."

According to an estimate, Alang ship-recycling industry provides direct employment to 15,000 and indirect employment to nearly 1.5 lakh.

"We are expecting the situation to ease after monsoon recedes as the construction activity is expected to pick up," Mendapara added.

Source: times of india. 22 August 2013

20 August 2013

New ship repair company to replace existing firm at Mare Island:

Mare Island will trade one waterfront marine company for another, the area's developer announced Monday.

Mare Island Shipyard LLC, the company that put two of the former naval shipyard's giant dry docks back into use at the beginning of 2011, has exercised its right to end its lease with developer Lennar Mare Island years early and is due to depart by Nov. 1, the developer's spokesman said.

"LMI (Lennar Mare Island) has made every effort to support and retain MISY (Mare Island Ship Yard) and we regret the new ownership group chose to end their lease early," Lennar Mare Island spokesman Jason Keadjian said Monday.

The new company, called Mare Island Dry Dock, LLC, recently completed a lease for an undetermined time period for Dry Docks 2 and 3 and will occupy the same 16 acres and existing infrastructure as current tenant Mare Island Ship Yard has, Keadjian said. This company will focus immediately on ship repair work, officials say.

"We've got many things to do to be prepared and as they say in the Navy, 'hit the decks running,' " Mare Island Dry Docks Vice President Steven Park said by phone Monday. "We have been looking for a West Coast, and I do mean West Coast location. We've looked for the last nearly two years for a suitable location."

The new company hopes to create as many as 100 jobs in its first year, and up to 300 in a five-year period, and repair and/or maintain up to 20 ships a year, according to a Lennar press release. Park added that it is "fundamental" to meet with and reach out to existing employees.

Financial backing and management for the operation comes from Philadelphia-based investment group Dimeling, Schreiber & Park, which has a history of investing and managing large-scale shipyard operations in Boston, Philadelphia and New York, according to the release.

Mare Island Ship Yard LLC, formerly Allied Defense Recycling, was still formulating a public response to the abrupt announcement Monday and declined to comment beforehand. The company first shared with Lennar its plans to leave in June, setting in motion a search for a replacement tenant, Keadjian said. The Times-Herald's recent inquiries to Mare Island Ship Yard into the company's health, prior to Lennar Mare Island's announcement, were dismissed as inaccurate rumors.

The Mare Island company, which opened for business in February 2011, originally touted plans to seek out federal contracts with the U.S. Maritime Administration, or MARAD, to scrap "mothballed" ships from the nearby Suisun Bay Reserve Fleet, off Benicia's shores.

The shipyard, however, was only able to dismantle two of those ships, the Solon Turman and the Lincoln -- those contracts awarded on a non-competitive basis. Once up against other ship dismantling companies, particularly those based in Texas, Mare Island Ship Yard was unable to secure further dismantling contracts.

In fact, the ship scrapping dynamic altered significantly during Mare Island Ship Yard's first year -- from having the government pay for the recycling work to having companies competing to pay millions purchase the ships outright. Mare Island Ship Yard did, however, begin supplementing its federal hull-cleaning jobs with other smaller ship repair and dismantling work in recent years, ideas originally floated in the months prior to the shipyard's opening.

Mare Island Dry Dock will neighbor historic Dry Dock 1 and Dry Dock 4, recently leased to Jerico Products/Lind Brothers as a company expansion.
Source: Times-Herald. By Jessica A. York. 20 August

BIMCO: Demolition Counterbalances New Ship Deliveries

Demand in the container shipping segment is “hobbling forward,” as a “healthy level” of demolition counterbalances the inflow of new and larger ships, according to the BIMCO Shipping Market Overview & Outlook report for August.

Demand was positive on the intra-Asia and trans-Pacific trade routes, as well as the Europe-to-Asia backhaul lane, but demand was low on the Asia-to-Europe front-haul leg, the report showed. Meanwhile, the report noted that a total of 258,000 20-foot-equivalent units have been demolished year-to-date, and predicated another 200,000 TEUs would leave the global fleet before the end of 2013. BIMCO also forecasted that new ship deliveries in 2013 will exceed 1.4 million TEUs.

Overall, the global shipyard orderbook is shrinking, standing now at 90 million compensated gross tonnage, down 13 percent compared to the same time last year, BIMCO said. Global deliveries are down, too, as deliveries in the first five months of 2013 were 23 percent less year-over-year.

However, new orders for container ships are surfacing, with 85 percent of the 2013 orders for post-8,000-TEU-size tonnage, according to the report. Furthermore, BIMCO said the Asia-Europe trade will employ only ultra-large container ships, with capacity of 10,000-plus TEUs, by mid-June 2015, based on scheduled deliveries.

“Future prevalence of slow-steaming remains pivotal for a judgment regarding overcapacity,” BIMCO noted.

Source: The Journal Of Commerce. 19 August 2013

GMS weekly report on Chinese ship breaking industry for WEEK 33 of 2013:

As perhaps the only market (along with Turkey) currently displaying aity aggression to buy, it was a surprise this week to see Chinese buyers go without sustenance.

For any vessels positioned in the area, the voyage to the sub continent no longer makes sense for owners and tor some larger sized units with spares and fuel, prices started to even approach what the sub continent might pay.

Such speculation is the result of a barren last quarter of the year in China, with most scrap yards almost completely empty. This new found confidence and intent to buy is an encouraging sign however and may bode well for competing markets going into the fourth quarter of this year.

Source: steel guru. 20 August 2013

GMS weekly report on Indian ship breaking industry for WEEK 33 of 2013:

Another drastic week of decline and fall in the Indian market saw many end buyers fearing for their very livelihoods. One end buyer has already filed for bankruptcy and gone out of business, after this most recent Indian recession and many others are desperately hoping they do not go the same way, in what has only become a damage limitation exercise.

The Indian Rupee made matters worse, briefly touching 62 to the Dollar, in another disastrous week for the currency and most end buyers have simply decided not to offer at all whilst such extreme volatility reigns in the market.

Local steel plate prices too have been equally unpredictable and there seems little incentive for buyers to improve their numbers at present, let alone offer at all whilst such chaos reigns.

As a result, there were no new sales to speak of, as most ship-owners looked on unimpressed at the dismal offers on the table. For those cash buyers still with inventory to offload, it was another desperate week trying to raise and maintain buyers.

It may be suggested that the only way can be up from here, but we have thought that before only for the market to fall yet further and disappoint even the most hardened pessimists.

Source: Steel Guru. 20 August 2013

GMS weekly report on Bangladesh ship breaking industry for WEEK 33 of 2013:

With steel plate prices falling drastically, end buyers this week have called a strike until August 30th and have resolved not to sell anv of their steel stockpiles until some recovery in the resale price of steel is forthcoming.

It has therefore been a very sluggish month in Bangladesh for the most part. Even though cash buyers and ship owners want to see some sort of encouragement on levels, there was unfortunately no positive news to report in that regard as prices tailed off on dry units well below 380/LT LDT again.

For that reason, there were no sales to speak of and it mav be some time before activity picks up once again, in a market that has dramatically slumped since the first half of this year.

Source: steel guru. 20 August 2013

GMS weekly report on ship breaking industry for WEEK 33 of 2013:

Any hopes that a post Eid resurgence would see prices and sentiment push on in the Indian sub-continent recycling markets were dashed this week as both currency and local steel plate prices continued to defy onlookers.

The Indian Rupee hit vet another historical low of 62 to the US Dollar and spent much of the week trading in and around an unprecedented INR 61. In fact, local fears that a catastrophic 65 could be hit do not seem bevond the realms of possibility now, despite the best efforts of the Indian government to restrict the decline.

This has traditionally been a far quieter period of time in the Indian sub-continent recycling markets due to the monsoon season and the summer months bringing an altogether slower supply of inventory.

Furthermore, the opening half of the year, as has been the case for the first half of 2013, is usually a blur of activity with end buyers across the board filling their plots with a variety of vessels. The inevitable summer lull usually provides an appropriate breather for the industry.

Ramadan and Eid have also overlapped with the monsoon months to virtually bring to a halt, much of the activity in the Pakistan and Bangladeshi markets.

On top of this, local fundamentals in all sub-continent destinations have conspired to send sentiments and prices spiraling. Currencies in India, Pakistan and Bangladesh have depreciated significantly along with local steel plate prices - something that has led many end buyers to simply shut up shop and avoid offering until some greater stability is seen in the market.

The one bright spot concerns the China market - where price and demand finally appears to have picked up after almost one whole quarter in the doldrums. Hopefully this bodes well for the international market at large.

For the right units Chinese buyers are prepared to speculate well above market at impressive numbers almost comparative with sub continent levels.

For week 33 of 2013, GMS demo rankings for the week are as below:

Market Sentiment
USD 375/lt ldt
USD 410/lt ldt
USD 375/ltldt
USD 410/ltldt
USD 375/lt ldt
USD 410/lt ldt
USD 340/lt ldt
USD 350/lt ldt

Source: steel guru. 20 August 2013