In the world’s biggest ship recycling centre on India’s Arabian Sea coast, workers with blow torches cut segments of steel stripped from the rusting hull of a towering cargo ship, sold for scrap by its Japanese owner.
But in Alang, a town located in Prime Minister Narendra Modi’s home state of Gujarat, more than half of the ship-breaking yards have shut in the past two years and the future of the trade in India and neighbours Bangladesh and Pakistan is bleak.
The industry has been hit by a flood of cheap Chinese steel, and new European Union environmental rules due later this year threaten to push business to more modern yards in places like China and Turkey.
“Because the ships are coming in less numbers, and there is very poor viability, in fact no viability. So now the ship is coming in one fourth number of usually it comes. Earlier we were receiving around 30, 35 ships every month, and these days 10 to 12 ships every month,” says Chintan Kalthia, whose company R.L. Kalthia Ship Breaking Pvt Ltd runs one of Alang’s more modern yards. It is currently breaking up the biggest ship in Alang, after months of negotiations with its Japanese owner.
Ship breakers globally bought 25.2 million deadweight tonnes (dwt) of vessels up to early July, against 33.8 million dwt all of last year, with Bangladesh the largest buyer, according to shipping services firm Clarkson.
The ships sold to South Asian breakers, which control about 70 percent of the market, are winched at high tide onto a beach, where they are taken apart by mostly migrant labourers.
Equipment, such as radars, engines – and even tables and chairs are taken off and sold. The steel from the hull is removed for scrap.
It takes up to nine months for a typical bulk carrier in India to be broken up and its steel processed.
About 60,000 used to work in the yards with thousands more in spin-off businesses, said yard owners.
But roads on the 11 km (7 mile) beach front which were once busy are now quiet.
Due to a plunge in steel prices, ship owners are getting about $3.6 million less for the 25,000 tonnes of recoverable metal from a typical iron ore or coal carrying ship than just eight months ago.
With China’s economy slowing, its steel exports soared 51 percent to a record 93.78 million tonnes last year and are up nearly 30 percent in the first five months of 2015.
The impact has been felt in Alang where the number of active yards fell to 50 this year from more than 100 in 2014, according to the Ship Recycling Industries Association India.
The number of vessels beached also dropped to a six-year low of 275 last year and was only 54 in the last three months, it said.
“Unemployment ratio is going up so people have started going, and you can see like earlier we used to work on at least 300 people in total used to work on this plot, particular plot. Right now we have only 110. That is because of the slowdown, our production capacity has gone down, so, of course, we have to reduce and cut our costs,” said Nitesh Aggarwal, the owner of Baijnath Belaram shipbreaking yard.
Workers employed by the shipbreakers are working as hard as they ever, but the returns are worsening.
“Things are really bad. There is no work and whoever is lucky enough to find work, he has to take a cut in his salary. If we don’t get work here then how will we earn, how will we support our families and what will we eat?” said Pyare Lal Gaur who has been working in Alang for six years.
“I am the sole earning member of my family. I have three children, a wife, a mother and a father to support. If I will not work, then how will my house run? It is like if the pillar of the house is weakened then how will it support the ceiling? The house will collapse. So, you see so many people will suffer if I lose my job,” said Jaipullah, another migrant worker employed by a ship breaking company.
As well as facing pressure from cheap Chinese steel, there are also calls to stop beach scrapping because of the danger and environmental damage from pollutants left to drain into the sea.
Highlighting the risks, five people were killed and at least 10 injured after an explosion in a chemical tanker being dismantled in Alang last year, local media said.
Workers can also face health hazards such as lead paint and asbestos when working on ships.
The European Commission will introduce tougher environmental controls some time after December. While not specifically banning beach scrapping, owners of ships registered in EU countries will have to scrap them at approved facilities, a move that could favour countries such as China and Turkey where ships are taken apart in docks.
In a bid to allay environmental concerns, some yards in South Asia have cemented their work area to try to prevent seepage of oil or chemicals, but many lack the money to do this.
Source: Hellenic shipping news. 5 October 2015