26 April 2015

Infrastructure push: Indian yards to demolish vessels to increase scrapped metal supply

SINGAPORE: Indian yards will demolish a number of vessels as it needs to increase supply of scrapped metal for the country's infrastructure development programmes.

The shipping market is weak and it is wise to replace older and inefficient vessels, said delegates at SeaAsia, a three-day conference and exhibition held at April 21-23 in Singapore.

"Indian yards are likely to scrap much higher number vessels than about 350 scrapped in 2014," said Zafer Gungor, ship repair and conversion manager at Sefine Shipyard which is building five new ships this year.

India will benefit from the large volume of ship demolition as it needs to increase supply of scrapped metal for melting into steel and meet massive demand for iron and steel products from the infrastructure development programmes announced by the government.

Comparatively, Turkish yards are expected to demolish about 500 ships, but most of these would be of smaller sizes with lower deadweight tonnage, Zafer said.

Shipbreaking yards at Alan, in Gujarat, have already demolished or were demolishing 107 ships in the first four months of this year, according to Deven Jagad, proprietor of the Bhavnagar-based Mahadev Corporation Shipping and Marine Supplier which markets second hand ship machinery.

Ship demolition at Alan yards more than doubled in 2014 from 150 in 2010, added Aarchi Marine Services' Tarik Wala, who also markets reconditioned ship machineries at Bhavnagar.

"We expect Alan yards to break 330-350 ships this year," Jagan," said Jagan.

But outsiders are putting the number higher, given ship-owners urgency to reduce the number of idle floaters for cost reasons.

Ship-owners and managers agreed with the high level of ships being put out of services due to gloomy demand and the ongoing slide in chartering and cargo rates.

In the past, China had topped the list of ship-breakers, as it was then to build scrap capacity for developing infrastructure prior to the 2008 Olympics in Beijing.

But now the Chinese are not that aggressive in sourcing vessels for breaking as they have excessive supply of steel from domestic mills.

For the Indians, though the authorities have listed out some labour safety and pollution rules, ship-breaking is an important source of building inventory of scrapped metal, according to a mill-based source at the conference.

Source: economic times. 24 April 2015

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