24 September 2013

Welsh Ship Recycler Lands Contract:

Swansea Drydocks will scrap and recycle a mothballed Royal Navy frigate.

Welsh ship dismantling firm Swansea Drydocks has been awarded a contract from the U.K.’s Ministry of Defence to scrap and recycle the former HMS Cornwall, a Royal Navy type 22 frigate. The vessel, built in 1985, was decommissioned in 2011.

To win the contract Swansea Drydocks says it was required to “demonstrate its capabilities and resources; relevant experience and technical expertise; obtain mandatory permits, approvals and licenses and those of its subcontractors; the competence to deliver a safe and environmentally sound ship recycling service and the ability to maximize the financial return from the ship’s metals, materials and equipment while minimizing waste to landfill.”

“Developing Swansea Drydocks into a world class ship repair and recycling facility has been a huge challenge,” says Karl Dunn, managing director of the firm. “It’s taken us several years of hard work and significant investment to be in a position to win this tender. As a result, we are beginning to achieve the goals we set for the business and we anticipate substantial growth over the next few years.”

Sourcerecycling today. 1 September 2013

The serious business of ship recycling – The snapshot over the years

The last three years have been extremely significant in the shipping industry as a whole and has been a wake up call to several industry veterans. The starting of the market crash and collapse in 2008 with the slow but steady rise since then has forced many industry players to re-think their strategy and positions across the globe and sectors. Throughout the world shipping companies have closed shops or relocated to more friendly jurisdictions and pruned their top staff and management in order to conserve costs and running expenses. The “green dollars” industry slowly turned into the “red dollars” industry. The veteran shipping banks do not want to finance shipping any further thereby accelerating the rate of foreclosure leading to forced sale of Vessels across High Courts in Singapore, India, Bangladesh and even China.

The Role of a Cash Buyer:

Companies such as WIRANA within the ship recycling industry are known as Cash Buyers since they purchase, from the Owners, the Vessel, basis 100 percent cash. In turn the Cash Buyer would sell the Vessel to a ship recycler in any one of the ship recycling countries. For Vessels purchased basis “as is” the Cash Buyer takes over the Vessel at the delivery port and then boards his own crew for the sailing of the Vessel. In the meantime the Vessel is re-flagged, given a brand new name and is provided a fresh set of Insurance cover for the voyage to the recycling yards. Therefore WIRANA is rightly referred to as an underwriter of recycling market risks. Due to fluctuations in steel prices in an extremely volatile market the Owners / Sellers could stand to lose millions of dollars by the time the Vessel arrives at delivery Port. Irrespective of market conditions Principals of WIRANA have stood by the Owners and Sellers like the ROCK and have underwritten as part of their regular market practice.

WIRANA upon delivery of the Vessel in the Indian Subcontinent accepts Letter of Credit (LC) as the mode of payment from their end ship recyclers something which the original Owners maybe unwilling to accept or perhaps may have little experience in negotiating and therefore Owners prefer to work with Cash Buyers and it is estimated that atleast 98 percent of vessels for recycling are sold via Cash Buyers. Therefore at all times the Owners remain completely secure as their final payment from WIRANA for the Vessel is NOT contingent upon receiving funds from the end ship recyclers which clearly demonstrates that WIRANA act as the cushion between the Owners and the End Buyers of the Vessel.

Therefore WIRANA provide an important economic and distribution function to the Owners as Owners now deal with one single WIRANA who inturn deals with 300 ship recyclers between India, Pakistan, China (North and South), Turkey and Bangladesh.

WIRANA has the inhouse resources to continuously monitor the markets thereby placing WIRANA in the unique position to accurately and firmly guide Owners. This knowledge is country specific and involves the spread across the five major ship recycling markets. Using this position WIRANA remains fully abreast about various Government regulations and is constantly being updated thereby leading to an increase and maximization of the asset value for the Owners.

The Intervention of the Judiciary:


Both India and Bangladesh have seen their fair value of litigations involving the ship recycling markets. In India the arrival of the MV BLUE LADY ex SS NORWAY caused a huge uproar due to the alleged quantities of asbestos and other hazardous materials on her. The matter was dragged right upto the Supreme Court of India which is the apex Court body deciding on major issues. The Supreme Court handled the matter for months and then laid down extremely stringent rules and regulations for the governance of the ship recycling industry. The rules and regulations came to be followed by all sectors and industries involved with ship recycling and it was essentially directed to set the chaos in order. Some of the salient features of the Supreme Court order were:

Submission of the Ship Recycling Plan (SRP).
Details of the Vessel including best possible quantities of wastes on her.
Ship recycling schedules with sequences of work.
Operational work procedures
Availability of work handling equipment and PPEs
Plan for removing of oil and cleaning of tanks.
Hazardous wastes handling and disposal plans.
Gas Free for Hot Works certificate issued by the competent authority.
Identification and marking of all no breathing spaces.
Identification and marking of all places likely to contain hazardous wastes.
Confirmation that ballast water has been exchanged in high seas.
Dismantling stage
Waste water down stream stage.


The Bangladesh ship recycling industry was hit by the landmark environmental litigation initiated by the Bangladesh Environmental Law Association (BELA) which sought inter alia directions from the Supreme Court of Bangladesh on the safe and environmentally sound recycling of Vessels arriving for recycling at Chittagong.

Sensing an immediate concern to set the house in Order the Supreme Court of Bangladesh banned the working of the recycling industry for 10 months in 2011 and directed the Shipping Ministry and Ministry of Environment to frame “Ship Recycling Guidelines” within a time frame of six months. Relentless efforts by BELA saw the industry running in all four directions to comply with the Order of the Apex Court which mirrored the Order passed by the Indian Supreme Court. For the very first time Vessels arriving Bangladesh were required to be Gas Free for Hot Works (Naked Flame Rules) as well as opposed to the plain Gas Free for Man Entry requirements which are far less stringent and less onerous.

Ship recycling is an important social economic activity which provides direct and indirect employment to over 500,000 people. Looking at the growing economic burden and perhaps the lack of contribution due to closure of millions of dollars in terms of direct and indirect taxes the Supreme Court allowed the temporary re-opening of the industry in May 2011 for a period of three months further extendable upon the terms and conditions determined by the Court.


Unfortunately Pakistan has consistently lagged behind the global race on upgrading themselves to the next tier. The yards there continue to be rudimentary in nature heavily relying upon human work force and labor with little care for industrial rights and consequent violations. The inherent lack to upgrade perhaps stems from the less number of vessels arriving each year for recycling to Pakistan which is directly proportionate to the price being paid by shiprecyclers.

Recycling Capacities:


In India the shiprecycling activities are principally carried out at Alang which is situated on the West Coast of India in the state of Gujarat. At the moment Alang has approximately 175 active and fully licensed and functional yards which are leased by the Government of Gujarat for a period of 10 years to shiprecyclers with the leases being renewed upon their expiry appropriately. To complement the yards at Alang we have some recycling yards at Jamnagar which is a few nautical miles away from Alang but again in the same state of Gujarat. The unique strength of Alang is that they rely upon the beaching tides which vary month to month in order to derive the maximum advantage of the force of the water to push the vessel upto the beach. Ofcourse some vessels that are dead and under tow or those of extremely low LDT do not require meeting the beaching tide schedules and can beach at any time during the month. Both Alang and Jamnagar are under the aegis of the Gujarat Maritime Board (GMB) which operates under the directions of the Government of Gujarat.

More than 8000 Vessels have been scrapped at Alang so far since 1983 generating steel output in excess of 90 million tons. In an average year Alang recycles about 600 Vessels with annual sales turnover from this activity of about of about USD 1.6 billion.


In Bangladesh there are approximately 55 shiprecycling yards which are fully functional and meeting the recycling needs of the nation. This industry now comes under the Ministry of Industries as opposed to the Ministry of Shipping and any ship coming inwards for recycling is required to obtain a “No Objection Certificate” in order for the Letter of Credit to be opened from the shiprecyclers bank. Unless this is provided the Bank will not start the various procedures required for the release of the Letter of Credit which may then considerably delay the beaching process of the Vessel. In Bangladesh as well Vessels are beached accordingly to respective beaching tides and Vessels need to strictly meet these tides in order to prevent considerable waiting at anchorage sometimes upto 14 days until the next tide.


In Pakistan there are approximately 25 shiprecycling yards at the coast of Gadani in Baluchistan which are under the Ministry of Revenue but outside the territorial jurisdiction of Karachi. The inwards formalities are little and vessels are beached without any hassles considering that no tides are required to be met. Therefore any Owner looking for quick beaching and swift money in the pocket may perhaps find his solace and answers in Pakistan as opposed to India and Bangladesh.

ISO Certifications:


In India there approximately exist more than 20 licensing bodies and the industry is extremely and heavily regulated with little possible gaps. With the stepping in of the Supreme Court the industry realized the urgent need to upgrade themselves to the ISO Club. So in this very tough and competitive environment the shiprecyclers spent their own funds and invested manpower to meet the stringent standards of ISO without any financial or other support from any third party. Currently atleast 100 yards are certified with ISO 14001/9001 and OHSAS 18001 and atleast 50 yards have the ISO 30000.


Out of the 55 yards atleast 25 yards have the ISO 14001/9001 and OHSAS 18001 including the ISO 30000 which is remarkable considering the levels of Bangladesh some years ago. We applaud the initiatives taken by the shiprecycling community to raise the bar and improve the health and standard of living of their workers and their surrounding environment. This indeed shows that even in non subsidized economies and coming from those industries that receive little or no support from the Government a small group of recyclers are making all efforts to make that “big change” something which shall benefit the future generations of the shiprecycling industry and those directly and indirectly connected with it.


Unfortunately for Pakistan they have lagged behind even in this race and out of the 25 shiprecycling yards none of them are even the basic ISO certified. The lack of interest as explained earlier stems from a variety of reasons including the less offering of Vessels and the potential terrorism ridden economy dealing with a highly unstable Government and regime. For Pakistan the adoption to ISO standards seems difficult in the foreseeable future. Until adopted and strictly enforced the industry will continue to work using old practices and methods.

Process of Beaching: Clean and Green way in the forward march:

The beaching method for ship recycling has been successfully practiced for several years along the 10 km long beach at Alang which has a very high tidal gradient, leaving vessels out of the water during low tide. In order to pronounce a particular method of ship recycling as environmentally friendly, an exhaustive study of beaching or drydocking should be carried out, and only then can one conclude accurately on any particular method.

A comparative life cycle assessment has been initiated of beachings compared to dry-docking in India, and involves estimating the environmental footprint of each for both facilities construction and subsequent operation. In the preliminary analysis it could be clearly seen that the capability of the beaching method practiced at Alang to recycle is far superior than the dry dock method followed elsewhere.

For the drydock approach to scrapping the infrastructure requires cement, concrete and the steel during construction and a power supply for operation adding to environmental footprint.

At Alang the following agencies of the Government of Gujarat are involved upon the arrival of the Vessel for inward clearances:

Gujarat Maritime Board
Gujarat Pollution Control Board
Explosives Department
Atomic Energy and Research Board (AERB)
The wastes that fall in the inter-tidal zone and on the dry portion of the ship recycling yard during the dismantling of Vessels remains the same in quality and quantity irrespective of the dismantling method followed. Those criticizing beaching methods have little or no experience of recycling a large number of different types of Vessels.

They have, at best, broken a few small Vessels and committed them to landfill sites. The International Maritime Organization’s International Convention for the Safe and Environmentally Sound Recycling of Vessels (now the HK Convention of 2009) is indeed a most welcome step since it has provided, for the first time, an international convention that addresses and hopefully systematizes all the operations, so that health and safety of workers and prevention of pollution of the environment, both at sea and ashore, can be ensured and verified. In the unlikely event that the beaching method of ship recycling is banned, a far greater socio-economic harm will be caused to more than 500,000 workers who are employed in the recycling yards on the Indian sub-continent than any adverse effect on environment. In addition this will have disastrous consequences on the indirect industries that are fully dependent on this recycling industry for their daily needs.

The benefits of ship recycling by beaching methods as carried out in the Indian sub-continent is environmentally and economically a sound practice and safe for workers; the industry is labor and capital intensive, economically viable for all stakeholders and a highly sustainable activity, considering the socio-economic situation in the region.

Shiprecycling verses Shipbreaking:

Often we see leading “shipping” publications switching between the words “Shiprecycling” and “Shipbreaking” and perhaps the confusion stems from the “lack of knowledge” in the eventual end use of the Vessel by the ship recycling yards.

During the process of ship recycling the following items are recovered for re-use and re-circulation in the markets:

1. Ship steel – this is the primary material from the ship and is used by the steel re-rolling mills to convert in to rods and bars, which are used in the infrastructural projects and in the ever growing construction and other allied industries in the Indian subcontinent.

2. Ropes and Chains – these are generally re-exported for re-use in the maritime industry or re-used by the ship recyclers themselves at their yards.

3. Generators – these are used in most major industrial concerns such as garment manufacturing and washing units or in the agricultural sectors where there is shortage of regular power supply or generation. Often major Owners seek these for their sister Vessels trading in other jurisdictions and therefore this may form an important item of export.

4. Boilers – these are used in rice and jute mills across the country. Again these sometimes form the bulk of the export orders due to their high re-use value.

5. Furniture, beds, cots, bunks, cabin materials – these are either purchased by mid-tier households and / or by public hospitals, emergency camps, hotels, motels, hostels, Red Cross and YMCA etc.

6. Utensils, crockeries – these are purchased by households, emergency camps, hospitals and hotels.

7. Electrical items, electronic appliances, irons, heaters, Insulators – these are re-used by Industrial concerns and agricultural houses.

8. Sanitary wares, bathroom mirrors – Mid-tier households and hotels are the biggest purchasers.

9. Food items, bottled water, packed non perishable food stocks, biscuits, tinned food – Households and small hotels are potential buyers.

10. Glassware – Industries and showroom owners are the biggest Buyers.

11. Fridges – these are purchased by households, small hotels, Industrial houses, mid tier purchasers and factories.

12. Pipes and Fittings, wires, coils, rubber – Agricultural and domestic use for most pipes and fittings and other items.

13. Paintings / Sofas / Desks / Chairs – Households, hotels and factories hold the biggest shopping bags.

14. Oil and other products removed – Depending on the quality they are resold to licensed factories for their use.

15. Sludges, paints etc – Are disposed under the guidelines framed by the Gujarat Maritime Board into specific incinerators.

16. Asbestos and hazardous materials – Are sent to the pre-determined and Government approved landfill sites after being appropriately bagged, itemized and sealed.

17. Rubber and other materials recovered – These are sent to the various recycling units for their secondary market use and are often utilized by the car and transport industry due to its durability and thickness.

In short, the recycling markets have developed a ‘reuse’ market for every nut, bolt and the kitchen sink found on board the vessel. This industry is entirely ‘self dependant and reliant’ and infact it supplies all the essential items to the world at large and is the backbone for many indirect industries in the Indian subcontinent. You will be surprised but Alang in an average year recycles about 600 Vessels with annual sales turnover of about USD 1.6 billion. Certainly ‘breaking’ would not generate this revenue income!

The IMO Convention is indeed a most welcome step since it has provided, for the first time, an international convention that addresses and hopefully systematises all the operations, so that health and safety of workers and prevention of pollution of the environment, both at sea and ashore, can be ensured and verified. In the unlikely event that the beaching method of ship recycling is banned a far greater socio-economic harm will be caused to more than 500,000 workers who are employed in the recycling yards on the Indian sub-continent than any adverse effect on environment. The benefits of ship recycling by beaching methods as carried out in the Indian sub-continent is environmentally and economically a sound practice and safe for workers; the industry is labor and capital intensive, economically viable for all stakeholders and a highly sustainable activity considering the socio-economic situation in the region.

Strange as it may sound, unlike any other industry in the western world, the ship recycling industry does not have an international trade association, which represents the interests of the ship recycling industry. In light of the above, there are no media savvy individuals that can get the message of the industry across to policy makers, bureaucrats, media and the public at large. The gap between perception and reality is perhaps the widest in the ship recycling industry than any other industry in the modern world. If the shipping fraternity does not take the initiative to work together and find practical solutions, then the day will arrive soon, when a ship for scrap is indeed a liability and not an asset.

Wirana and Its background:

Shashank Agrawal is the Group Legal Advisor to Wirana Shipping Corporation which is based in Singapore and can be reached on +91 9825205665 or +91 9825207746

Wirana is the OLDEST Cash Buyer and was established in 1983. In 2009 and 2010 Wirana successfully negotiated over 320 vessels with LDT in excess of 3 million and DWT in excess of 12 million and has so far negotiated over 2200 Vessels and a delivered a total DWT in excess of 51 million since 1983.

Wirana is the FIRST and ONLY Cash Buyer to feature in the Guinness Book of World Records for the two ULCCs purchased with a combined LDT of 148,691 a record which EVEN TODAY REMAINS UNMATCHED AND UNBROKEN.

Source: shipping tribune. 8 September 2013

Pak, Bangla crew aboard ship near Alang protests over wages

A cargo vessel anchored near Alang ship-breaking yard in Bhavnagar has been mired in controversy as its crew members are reportedly protesting against its captain over alleged non-payment of their wages. The Panama-flagged cargo vessel, Meem, had approached the Alang ship-breaking yard some 20 days ago. However, a third party filed an admiralty suite against the vessel owners over the recovery of dues and, subsequently, the Bombay High Court ordered against its beaching in Alang. Since then, the 500-metric-tonne vessel has been anchored near Alang.

However, further trouble began on Tuesday as its crew, nationals of Pakistan and Bangladesh, reportedly ransacked the ship, protesting the non-payment of their wages. "Yesterday, we received a letter from the agent of the vessel stating the crew members aboard it were creating trouble for the captain of the ship. We have advised them to take police's help in case the situation worsens," an official of customs department posted at Alang told The Indian Express on Wednesday.

Compass Shipping Agency, a Bhavnagar-based firm, is the agent of the vessel and it has been liaising with the Indian authorities. The general cargo vessel was built in 1986.

The officer said there were five Pakistani and two Bangla nationals in the crew while the captain of the ship was a Syrian. "We have been told that the vessel had been on a long voyage and its owners were hit by financial crisis. So, the wages have not been paid for some time," the officer further said. However, Alang Marine police confirmed the captain or the agent had not approached them for any help. Meanwhile, Alang port officer Sudhir Chadha said the incident was their internal dispute and that port authorities had no role to play in it.

Source: Indian express. 5 September 2013

23 September 2013

All Above Board | Rupee’s slide pinches Alang ship breakers

Assuming the rupee stays put at the current exchange rate, breakers in Alang will book a combined loss of Rs.300 crore

Ship breakers in Alang on the coast of Gujarat, home to the world’s biggest ship-breaking facility, have stopped buying ships for dismantling because of the steep fall in the value of the rupee since May this year.

Typically, breakers buy ships on a deferred letter of credit basis where the amount is paid to the foreign seller after 180 days. As the transactions are denominated in dollars, the fall in the value of the rupee has imposed additional liability on the ship breakers. This is because they are required to make the payment at the time of physical delivery of the ship purchased in April-May in dollars at the prevailing exchange rates, which means forking out more rupees for every dollar.

The rupee has fallen almost 14.67% against the dollar since the start of May.
The ship-breaking industry in Alang, where the annual turnover touches more than Rs.10,000 crore, is staring at a crisis.

Steel scrap from the demolished ships is a major source of raw material for India’s steel re-rolling mills. Normally, at least 70% of the total light displacement tonnage, or LDT, (weight of the ship excluding cargo, fuel, ballast, stores, passengers and crew) of a ship broken constitutes of re-rollable scrap. These are converted into bars and rods that are used in the construction sector.

Ship breaking in Alang has also spawned a unique bazaar with rows of shops under huge tents that sell everything from consumer to industrial goods procured from the vessels that are recycled there.

Alang has some 130 plots of varying sizes where ships that have completed their useful life are broken. Out of this some 100 plots are operational.

Currently, about 90-100 ships are being taken apart in Alang, all of which were purchased before the rupee started its downward spiral. That makes it one ship or less for a plot for breaking.

Normally, at any given point in time, about 130-140 ships are dismantled in Alang where ship breaking started in 1982.

Assuming the rupee stays put at the current exchange rate, breakers in Alang will book a combined loss of Rs.300 crore.

As the outlook for the rupee remains hazy, breakers are reluctant to strike new deals because of concerns on viability.

The industry, which employs some 40,000 people, has already started making adjustments to deal with the situation.

Some 30 yards have stopped operations. The 100 plots that are operational are working at minimum speed. Working hours have been reduced and weekend holidays have been extended.

In boom time, Alang ran a 12-hour schedule from 7am to 7pm. The cutting time has been reduced to nine hours between 8am and 5pm with an hour’s break for lunch in between.

These days, workers don’t dismantle ships on Saturdays— earlier they had a weekly off only on Sundays.

While banks have turned cautious in lending money, private lending (there is large scale private lending in Alang through informal channels) has stopped altogether.

Alang is also facing another issue. The Gujarat government has not finalized a policy for leasing of plots to ship breakers to renew the earlier policy that ended in September 2009 after a five year run.

Since then, pending the new policy, the plot leases are being renewed every 3-6 months. In the meanwhile, the Gujarat government has taken a blanket undertaking from the ship breakers on a Rs.100 stamp paper that whatever policy will be finalized would be acceptable to them.

Plot leases have three components—a development charge, a breaking charge and rent for the land. Gujarat currently collects a development charge of Rs.200 per square metre per year, while the rent for the land has been set at Rs.60 per square metre per year. The breaking charge is Rs.100 per LDT of the ship.

The development charge collected from ship breakers are to be used for improving the infrastructure in Alang.

Using the rupee crisis as a bargaining point, ship breakers have asked the government to refrain from hiking the development charge in the new policy being finalized for leasing of plots.

They have also sought the introduction of a transfer clause in the new policy that allows an existing lease holder to sell his rights to a third party with the approval of the government.

India, Bangladesh, Pakistan and China carry out 80% of the world’s ship-breaking business.

Dismantling activities in Alang boomed from 2009 as a slowdown in global trade and lower freight rates forced global fleet owners to retire their aging ships at a faster pace. In the last four years beginning 2009-10, Alang dismantled 348, 357, 415, and 394 ships, respectively.

Since April this year, 134 ships have been dismantled. But, new transactions have come to a grinding halt in Alang due to the volatility in the rupee.

For the moment, ship breakers are pinning their hopes on the new governor of the Reserve Bank of India, Raghuram Rajan, to tide over the difficult days.

Source: live mint. 19 September 2013

Vessel dismantling idea runs aground at North Tongue Point:

Investors pull support after action by Port leaders

Frank Allen, the international seafood trader seeking to dismantle the region’s derelict vessels at North Tongue Point, said investors have tabled the funding for his Blue Ocean Environmental project.

Allen, whose main business is trading seafood internationally through his company, Live Online Seafood, said that shortly after reading The Daily Astorian story Sept. 12 about the Port of Astoria signing a memorandum of understanding regarding Tongue Point with an undisclosed party, his main investors from Seattle pulled out their funds.

“They need a site that is free of commitments and unencumbered,” said Allen, who said he has spent $100,000 on the project so far. “They don’t want to invest in anything that has another project going.

“They’ve pulled their funds, and I’m going to put pull my personal funds as well.”

The Port signed an MOU, said Commissioner Jack Bland, to could potentially divest the agency of the 40-acre facility's operation, which has often been cited as a money looser. The Port in 2009 signed a lease through 2019 with the Washington Group of Montana to operate North Tongue Point, now paying $350,000 a year in leases, in addition to maintenance, utilities and other costs.

Allen said the project had investment backing from a local maritime industry representative in southwest Washington and an investment fund manager from Seattle.

He approached the Port in April proposing a more environmentally conscious way of dismantling ships, as opposed to such shipbreaking operations as Alang, India, where vessels are run aground and torn apart haphazardly.

“North Tongue Point location is the only facility in the world of its kind that is sitting empty. Period,” he said about his primary reason for choosing Astoria for the proposal. “It’s a $500 million facility that’s sitting empty.

“When I did my labor research around here, there’s that kind of hardcore logging mentality. I felt that there – for a lack of better terms – wouldn’t be a lack of tough guys.”

Allen said there are 300 derelict vessels in Oregon and another 400 in Washington needing to be recycled, not mentioning the global problem. “I just got sick and tired that no one was doing anything about it,”

He asked the Port to start with a 40-foot fishing vessel moored at Tongue Point, rolling it onto the tarmac or into Hangar 3 with a dolly, cleaning and salvaging parts from it and then scrapping the metal. The metal would then be shipped to Seattle to steel firm Nucor Corp. for use domestically. Then the project would be stopped and the Port and the public briefed on the process.

The project ran into snags, namely being able to use Tongue Point’s Hangar 3, which used to house Pacific Expedition yacht-building company. Allen, who said the project got 95 percent of the way to kickoff, thanked City Manager Paul Benoit for working with him and making clear what he had to do to make the building usable.

“I’ve talked to probably 200 people that were naysayers and that were for this,” said Allen about the community’s reception.

Allen got a coordinator from the Department of Environmental Quality for his project through the North Coast Regional Solutions Center of the Gov. John Kitzhaber’s Office. “They all recognize that something has to be done, not just locally but worldwide.”

He received help from the Columbia River Estuary Study Taskforce and said the Port was also supportive.

“This thing isn’t done,” said Allen. “I’m still going to talk independently to Port commissioners.”

He leaves later this month to hunt for commodities in Asia and to develop a coffee plantation in Cambodia.

Source: daily astorian. By Edward Stratton. 19 September 2013

Ship owners invest more than $9.2 billion on newbuilding vessels during August:

Despite the fact that August is traditionally a slow month in terms of ships investment activity, ship owners have grasped this year the opportunity to close some deals, on the back of attractive pricing. According to the latest monthly report from shipbroker Golden Destiny, August 2013 ended with an upward momentum in secondhand and newbuilding investors’ appetite, while demolition activity followed a downward incline from previous year with lower vessel removals for bulkers and tankers and almost stable volume of disposals in the container segment.

According to the shipbroker's figures, in the second hand vessel market, there were 123 vessels traded for an invested capital of more than $1.9 billion, while an additional 33 deals were reported at an undisclosed sale price. By comparison, the similar figure of last year's August was 91 vessels. Similarly, in the newbuilding ordering business, there were 179 vessels reportedly on order this year for a total of over $9.2 billion, while 51 agreements were done at an undisclosed sum. During the August of 2012 there were 96 new orders. Finally, in terms of demolition activity a total of 48 vessels were sold for scrap, amounting to about 2.4 million dwt. The number is about half of last year, when a total of 102 vessels were scrapped.

The shipbroker noted that "the newbuilding activity is 41% up from the number of vessels changed hands during August as the appealing bottom low newbuilding prices and the new eco designs trigger investors’ desire for newbuilt vessels. The threat of oversupply seems to be ignored by shipping players that hold optimistic expectations for a full upturn of the market after the end of 2014", Golden Destiny said.

It also mentioned that "the declining trend in scrapping activity combined with the accelerated newbuilding business during 2013 create additional negative pressure in the current vessel supply-demand  imbalance and narrows hopes for a full early recovery. Demolition activity stood at 73% lower levels than the strong placement of newbuilding orders during August, with bulk carriers, tankers and containers experiencing higher volume of newbuilding activity than last year’s levels", the report noted.

It added that "compared with August 2012 levels, S&P and Newbuilding activity recorded 35% and 86% yearly increases respectively, for all vessel types, while demolition activity showed 53% year-on-year decrease. Bulk carriers and tankers remain in the main focus for investors either for buying secondhand vessels or ordering newbuilt vessels. In the bulk carrier segment, the S&P activity for secondhand vessels is lower than investors’ appetite for ordering due to strong placement of new orders for handy, ultramax and capesize vessel sizes. In the tanker segment, strong secondhand purchasing activity for small vessel sizes of less than 10,000dwt and MR products sustained a firm pace of investments and led the number of vessel purchases for secondhand tankers to surpass the number of new orders – 56 vessel purchases / 49 new orders. Despite oversupply issues, demand for the placement of new orders for large vessel sizes either in the bulk carrier or tanker segment represent excessive volume for August 2012 levels.
In the bulk carrier segment, 9 new orders reported in the capesize sector from only 1 new order in August 2012. In the tanker segment, 9 new orders reported in the VLCC segment from 2 in August 2012 and 10 for aframax vessels from zero reported business at similar month last year. In the container segment, the secondhand buying activity seems to follow the low pace of last year, while the repeated preference for the construction of post panamax containers led to new highs in the placement of new orders for containers (8 new orders reported for boxships of more than 10,000TEU from zero reported newbuilding business at similar month last year)", the shipbroker concluded.

Source: carbon positive. 19 September 2013

‘Astrid’ owner speaks of his sadness at decision to scrap the 95-year-old historic brig:

Pieter de Kam says scrapping ship marks the end of a tremendous adventure for him and his wife

The owner of the historic tall ship Astrid, which was salvaged last week after sinking off the west Cork coast yesterday, spoke of his sadness at the decision to send the 95-year-old sailing ship for scrapping.

Owner and skipper Capt Pieter de Kam said the decision was made in consultation with the insurers after assessing the damage to the vessel when she sank at Quay Rock off Ballymacus Point near Kinsale.

“I am very saddened at the decision but the Astrid hit the rocks very hard and the damage to her hull and keel is very extensive – three quarters of the hull is damaged and it would simply cost too many euros to repair and restore her,” he told The Irish Times.

He said he expected the ship to be scrapped in Cork in the coming weeks.

The 42-metre steel hulled Astrid ran into difficulty when participating in the Irish Sail Cruising Association’s Gathering Cruise after it engines failed when leaving Oysterhaven for Kinsale on July 24th and the ship ran on to the Quay Rock at Ballymaccus Point.

Source:  irish times. 19 September 2013

Coming soon: EU ship recycling regulation

Europe: The EU Council and Parliament have reached an agreement on the text of the much-discussed EU ship recycling regulation. This will come into force 20 days after it is published in the official EU journal, probably before the end of the year or in early 2014.

The new regulation will apply to large commercial sea-going vessels (of more than 500 GT) and will require ship owners to have an Inventory of Hazardous Materials (IHM) much earlier than by the expected entry-into-force date of the Hong Kong Convention. Within the first time window, it will require all ships flying under an EU flag to own an IHM; after seven years at the latest, all ships entering European ports will have to present the IHM to port state control authorities.

It is hoped that green-lighting the regulation in the coming months will further motivate Ship Recycling Facilities (SRFs) to appear on the already-established EU list of accepted SRFs so they may receive ships from EU member states for future recycling operations.

In addition, a ship recycling plan will have to be developed by the operator of the SRF prior to any recycling of a European ship; such a plan will be based on data provided by the ship owner and is thought to be 'essential' for the safe and sound treatment of the vessel.

Again, an IHM is key as ship owners will be required to minimise their cargo residues, remaining fuel oil and ship-generated wastes remaining on board. Regular surveys and port checks will be conducted to ascertain whether the vessels in question are in compliance with the IHM specifications of the new regulation.

Source: recycling international. 19 September 2013

Dalian Shipbuilding acquires import license for scrapping

Dalian: Dalian Shipbuilding Industry Corporation (DSIC) has announced that its subsidiary, Dalian Shipbuilding Industry Marine Services (DSIMS), has acquired an import license for the scrapping of ships and becomes the first shipyard in northeast China to have such a license.

DSIMS, invested in by DSIC (67%), PIL (18%) and Anshan Steel (15%), has developed 500,000 square metres of space for ship repair, ship breaking and offshore conversion on Changxing Island off Dalian

Source: sino ship news. 18 September 2013

GMS weekly report on ship breaking industry for WEEK 37 of 2013:

The return of some positivity in the Indian market (in particular) saw a number of high profile and high LDT vessels concluded for the week. The only market to miss out on a share of the tonnage was tlie underwhelming Bangladesh market once again.

An impressive appreciation in tlie Indian Rupee for a second consecutive week raised spirits in Alaxig and saw a number of rather speculative positions being taken by cash buyers as a result.

Certainly, the signs are that the worst is over in tlie sub-continent markets and the traditional fourth quarter surge in prices can finally take hold. Tlie shocking currency depreciation in both India and Pakistan had taken everyone by surprise, but now that the Rupee appears to be settling once again, die demand to acquire new units is starting to emerge in almost all markets.

The (mainly downward) fluctuation of local steel plate prices had caused some concern in tlie Indian market yet the constant volatility has almost become a normal part of life there and something that end buyers merely have come to accept.

Meanwhile, tlie rampant appetite on show in China, for vet another week, tempted mostly domestic owners to sell larger container, suezmax and VLCC units direct to local yards.

Finally, CMA CGM controlled RoRo ROSA DELMAS (14,222 LDT) has been reportedly sold into Turkey for a strong USD 327/LT LDT. News of reported delays in local deliveries has come forth as a backlog of vessels has been building up in Aliaga following tlie recent glut of deals concluded there (with Indian markets down recently), and many end buyers are trying to renegotiate agreed prices following tlie latest reversals on the Turkish Lira.

The capacity across all recycling destinations remains good and most end buyers seem content to dip into the market, to stock their yards once again, following an extended period on the sidelines.

Country               Market                 GEN CARGO Prices          TANKER Prices
India                  Bullish                  USD 360/lt ldt                USD 390/lt ldt
Pakistan             Bullish                  USD 360/lt ldt                USD 385/lt ldt
Bangladesh         Weak                   USD 355/lt ldt                USD 380/lt ldt
China                Bullish                  USD 350/lt ldt                 USD 365/lt ldt

Source: Steel Guru. 17 September 2013

GMS weekly report on Pakistan ship breaking industry for WEEK 37 of 2013:

With India overtaking Pakistan this week following some encouraging gains on the Rupee, the emerging Pakistan demand was yet to be satisfied. The truth is that prices will more than likely have to improve from their current standing, in order to acquire the desired share of market tonnage.

There was some speculation that the Turkish controlled handysize bulker H PIONEER (6,807 LDT) had been sold into India and whilst mere will most likely be an India option included in the deal the interest in Pakistan for this particular unit was strong.

The extremely strong and uncharacteristic price achieved could be down to the heavy bronze working and spare props, and the decent UK country of build. It will be interesting to see where this vessel eventually turns up and if it will make some money for all parties in the play.

Source: Steel Guru. 17 September 2013

GMS weekly report on China ship breaking industry for WEEK 37 of 2013:

Chinese buyers continued their irrepressible run this week, one that has seen them snap up the majority of the high profile market candidates at consistently impressive numbers. There is now no doubting that China is the market of the moment (particularly for those vessels positioned in the East) with the stability and demand it has afforded of late.

AMCL of Hong Kong committed one suezmax, the NEW FORTUNER (22,021 LDT) and one VLCC, the NEW VICTORY (38,364 LDT) to local buyers for a price rumored to be in the region of USD 380/LT LDT.

Additionally, HOEGH controlled LNG NORMAN LADY (23,880 MT) fetched an impressive USD 12 Million (about LISD 521/LT LDT) NETT price to the owners, in what has become the show stopping deal of the week. The 3700 LDT of solid aluminum tanks, about 300 Tons of SS 304 non-ferrous fixtures and being a full spare vessel did contribute to its strong price.

Yang Ming line of Taiwan sold their YM ZENITH (19,426 LDT) for a decent LISD 375/LT LDT and Chinese owners committed their handysize bulker ANIK (8,834 LDT) for a firm LTSD 362.5/LT LDT (with 250 T bunkers ROB) as the sales continued to rack up in another busy week.

Source: Steel Guru. 17 September 2013

GMS weekly report on Bangladesh ship breaking industry for WEEK 37 of 2013:

Some interesting developments in the Bangladeshi market this week, even saw vessels discharging in Chittagong position themselves to OTHER recycling destinations, so underwhelming were prices being quoted there.

It may be some time before Bangladeshi buyers start to acquire again with levels marooned in the mid 300s/LT LDT on dry tonnage and slightly higher on wet vessels. All other competing markets have pushed on significantly, but Chittagong buyers have been left in the shade again.

The currency remains stable but the losses incurred on the scrap steel prices are the chief source of discontent in the local market. It may be that some gains need to be seen in this area first before prices return to being competitive with the other markets.

Source: Steel Guru. 17 September 2013

GMS weekly report on Indian ship breaking industry for WEEK 37 of 2013:

The Indian Rupee continued its heartening gains of late, to finish the week at a much healthier INR 63.5 to the US Dollar. The appointment of the new RBI governor seems to have done wonders for the currency in just under two weeks as the Rupee has appreciated about 2.6% in the last week alone.

Steel prices were however, the major concern, as some alarming losses saw INR 1,000 per metric ton (about USD 16/LT LDT) wiped off in the space of 3 to 4 days. Such a slump has left many end buyers once again confused as to the direction of the markets and many cash buyer vessels remaining unsold as a result, with offers still tentative at best.

India still managed to position itself as the top sub continent market as the gains on the currency started to breed some confidence amongst local buyers again.

Two eye catching sales were concluded for the week with the Danaos controlled larger container HOPE (19,861 LDT) was committed for a firm USD 408/LT LDT. Even more extraordinarily, the SEABOXER (7,590 LDT) was fixed for an almost unthinkable L7SD 427/LT LDT (including 220 T bunkers on board upon delivery).

Interestingly both vessels remain unsold locally, indicating that the cash buyers may be gambling on a market upturn in the coming weeks, a dangerous tactic given the extent of reversals in the steel prices this week as well as the poor performance of the Indian market for the last several months.

Source: Steel Guru. 17 September 2013

17 September 2013

Ship Recycling Convention may put stakeholders in a fix:

Ship Recycling Conference focuses on issues that could find ship breakers and others in a predicament

Will the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the Hong Kong Convention) ever get ratified? What’s the difference between the Hong Kong Convention and the EU convention as far as beaching method of recycling is concerned? Is the beaching method banned by both conventions? These and several other issues raised at the 2nd Annual Conference of Ship Recycling on the Indian Sub-Continent in Mumbai organized by Hinode held last week, ended up in lengthy discussions. 

But the main issue that commanded lengthy deliberations was the beaching method of ship recycling. A possible fact that surprised most delegates was that most vessels in the world are recycled through the beaching process. If this method were to be banned it would lead to a massive number of abandoned ships drifting around in the oceans posing a grave threat to shipping - like the existence of tons of space junk floating in space revolving around the earth threatening billions of dollars of relatively newer satellites. The beaching method responsible for the lion share of ship recycling in the world is practiced in India, Bangladesh and Pakistan - and all three have so far refrained from ratifying the Hong Kong Convention.   

The reason for the popularity of beaching method according to A. V. Pradhan, Regional Manager of Class NK, India, is that it is far less capital intensive and far more cost effective compared to the dry dock method and hence is a preferred ship dismantling system. This way ship scrapping generates 40 million tons of steel per annum. Both HKC and EU Regulation do not ban beaching but require proper management including control of any leakage, in particular in intertidal zones. IHM broadly used in India is not the one which is stipulated in HKC and relevant IMO Guidelines. SRFMP (Ship Recycling Facility Management Plan) broadly used in SRFs in India is not the SRFP stipulated in HKC and relevant IMO Guidelines.  etc.

But according to Ajoy Chatterjee the former Chief Surveyor to the government of India and who represented the country at the IMO meetings on Ship recycling informed that beaching method was not banned. He appealed to the industry to go ahead and ratify the convention immediately as this would prove beneficial to them on the long run.

“The India’s Supreme Court had given a verdict which is a mirror image of Hong Kong Convention that was adopted in Hong Kong, from 11 to 15 May 2009 and attended by delegates from 63 countries,” stated ”Nitin Kanakiya, Honorary Secretary of the Ship Recycling Industries Association (India). He pointed out that Improvement is a continuous practice. But the Convention was a crisis of confidence and trust when the number of recommendations that were put forth by our industry was brushed aside. “There has been a hue and cry about the beaching method which turns out to be only confusion in the minds of a few. Our recycling industry basically generates steel and our industry has to be competitive to survive. There are just a few issues that need to be sorted out and we are ready to discuss as a responsible industry committed to integrating continuous improvement and the advancement for the betterment of the human beings. If volatility is a factor we can consider it and find a solution.   

Henning Gramann, Managing Director of GSR Services Germany contended that there was a lot of misunderstanding amongst the stakeholders of the industry. One cannot identify the hazardous material and its quantity in a ship just by looking at it. Another problem is the task of maintaining this inventory. “Once the convention comes into force the development of Inventory of Hazardous Material (IHM) will be a significant task for shipowners of both existing ships and new buildings,” he said. “To develop and maintain this Inventory will require a massive demand for experts. Hence there is a need to join forces for IHM preparation right away before the convention comes into force.”

In the panel discussion many voiced their opinion on the burden that will be cast on the ship owners for maintaining the IHM especially during the current downturn which could put many in the red. “The cost to the ship owner to maintain IHM will be around $ 30,000 per annum per vessel,” informed Rakesh Bhargava, Head, IHM, Green Recycling and Lay-up Services, Wilhelmsen Ship Management Sdn Bhd, Malaysia. However, Henning felt it should not be so exorbitant but may be on the higher side of $ 10,000. “Rajeev Nayyer, Head S & P New Building, Essar Shipping Ltd. clarified that IHM is not a one-time document. It is a live document and has to be continuously updated.”

A.V. Shah, Regional Officer, Bhavnagar, Gujarat Pollution Control Board drew attention to the several inconsistency. “There is lack of clarity particularly with respect to the work zone standard, safety standard and environmental standard. Who will be the authority concerned? Who will inspect the IHM and verify the material? He also wondered why asbestos should be considered hazardous since even today it is being extensively used for roofing, asphalt-asbestos floor tile, linoleum backing, ceiling tile, duct insulation for heating, ventilation and air conditioning (HVAC) systems and several other applications.

Pravin Nagarsheth, Advisor to the ship recycling associations of India, was wary about the EU convention and how it was to be implemented. Would it require ship recyclers from India to get their facilities registered with their ship owners or with the EU states? What would be the extent of the facility required?

He said, “The assumption that due to dry docking facility, India will get cheaper ships is not going to be true in a scenario where ship owners want maximum price for ship and they are going to market the ships through cash buyer intermediaries where no laws can be implemented.

“It is seen that the dry dock project is being designed for 30 ships a year i.e. about 3 ships a month, as against about 350 ships which are being recycled at present at Alang,” he said. “Basically India is against expensive dry dock method and would like to continue with economical, viable and cheap method of beaching only, for recycling the ships. Who will want to invest 40 per cent of the equity? What will be the return on that equity capital? Ultimately the exhorbitant burden of that equity will be passed on to the shipbreaker.”

Source: maritime professional. 9 September 2013