Ship stranded off Cape Breton has been stripped of valuable metals, company says:

HALIFAX - A company that has committed to dismantling a ship that's been stranded off Cape Breton for almost a year is accusing another firm of stripping the vessel of all of its valuable metals.

Abe Shah, a senior partner with the Bennington Group, makes the allegation in a letter to the Nova Scotia government that his company released to several news media organizations.

Shah said the province's Natural Resources Department hired a company last year to remove floatable items such as chairs and tables from the MV Miner, but instead the firm removed all precious metals.

"In every room, most of the floatables are still present," Shah says in his letter to the department dated Aug. 9.

"Whereas the brass on portholes, the brass on the captain's tables, stainless steel kitchen tables bolted to the floor, copper cabling that ran from the stern to the bow and from the engines to the electrical units, etc. have all been removed.

"The contractor's actions have deprived the owner and Bennington of non ferrous-items valued at more than $500,000."

The letter does not identify the contractor. But last fall, the provincial government hired Dutch company Mammoet Salvage to remove loose items and contaminants from the ship.

Bas Coppes, the president of the company's American division, said crews weren't able to remove all the floatable items because of the winter weather. He also said allegations that his company was stripping the ship are "ridiculous."

"We never took any brass or any valuable metals from the ship," Coppes said Friday in an interview. "We removed things like blankets, pillows, mattresses, all small things, all loose things."

Coppes said he doesn't remember seeing anything particularly valuable on the ship, calling most of the items on board "trash."

Shah includes a photo in his correspondence with the Natural Resources Department that he says shows it's been stripped of brass.

Bruce Nunn, a spokesman for the department, said government employees oversaw Mammoet Salvage's entire operation and there is no evidence that valuable metals were taken.

"There's no record that anything other than environmentally hazardous waste was removed," Nunn said.

Asked if it's possible someone went on the ship to take the metals, Nunn replied, "The ship's been there unsecured for more than seven months."

In an interview, Shah said he's no longer sure his New York-based company will make a profit from salvaging the ship, but he has no intention of backing out because it could harm his reputation.

"I put my name to it," he said. "I have a commitment."

Shah said any delays in the dismantlement of the MV Miner rest with the provincial and federal governments.

Premier Darrell Dexter has repeatedly called on Ottawa to accept a greater role in removing the ship, but Transport Canada says it's the responsibility of the Bennington Group.

The MV Miner ran aground on Scaterie Island on Sept. 20, 2011, while being towed to a scrapyard in Turkey.

Removal of the 230-metre bulk carrier was expected to start this week after more than a month of delays, but so far, there's been no progress.

Shah said the company needs both levels of government to conduct a pre-demolition site survey of the MV Miner before any salvaging can begin.

The company's provincial work authority expires Aug. 31. The plan was to have the work completed before the more active part of the hurricane season, which is usually in September.

Source: Brandon Sun.By Jane Gerster. 17 August 2012

http://www.brandonsun.com/lifestyles/breaking-news/ship-stranded-off-cape-breton-has-been-stripped-of-valuable-metals-company-says-166569416.html?thx=y

GMS report on shipbreaking industry for WEEK 34 of 2012:

An improving market in India set the tempo for a busy week in the ship recycling industry as the number of market deals concluded made it to double digits this week.

The activity though was solely concentrated into the Bangladesh and Indian markets, with both Pakistan and China missing out for another week.

The Turkish market has been very active of late as well, where levels have improved to such an extent over the past few months that they are now ahead of China in the price pecking order. As such, any vessels in the Mediterranean area today are more than likely to be heading to the shores of Turkey.

Pakistan has been actively competing with India over the past few weeks but has always been slightly behind on the numbers. Furthermore, the Gadani specialty of gas free for man entry for tankers (as opposed to hot works in both Bangladesh and India) have been slightly lacking of late, with containers and Handysize / Panamax bulkers being the flavor of the moment.

Meanwhile, Eid holidays have seen both Pakistan and Bangladesh largely offline for the past few weeks, but several perhaps speculative cash buyer deals were concluded into Chittagong, to the surprise of many.

Prices going into September tend to be on the bullish side, so cash buyers may be looking to speculate on a traditional seasonal shift in levels. Going into the final week of August therefore (with deliveries for mid to end September time), levels may be expected to persist.

Key factors going into week 35 will be how an already stuffed Bangladesh market and a keen to compete Pakistan react to the challenge laid down by a voracious India.

For week 34 of 2012, GMS demo rankings for the week are as below:

Country	Sentiment Market	GEN CARGO Prices	TANKER Prices
India	Bullish	USD410/ltldt	USD 435/lt ldt
Pakistan	Bullish	USD 405/lt ldt	USD 425/lt ldt
Bangladesh	Weak	USD 400/lt ldt	USD 425/lt ldt
China	Weak	USD310/ltldt	USD 330/lt ldt

Source: Steel Guru (sourced from GMS Weekly). 28 August 2012

http://www.steelguru.com/international_news/GMS_report_on_ship_breaking_industry_for_WEEK_34_2012/280642.html

Shipping firms continue to face rough weather

August 19, 2012:  The financial weather forecast for the shipping industry continues to show turbulence ahead. It was a challenging period for the industry last quarter and the outlook remains the same for the coming quarters.

Bruised by a slump in trade, subdued freight rates and high fuel costs, shipping companies reported moderate to flat growth last quarter. Industry experts say the uncertainty in Europe and oversupply of new tonnage would continue to squeeze the margins of ship owners at least for the next few months, with a lot depending on how Chinese trade moves forward.

LONG-TERM BENEFITS

However, ship owners, who tilted more in favour of long-term contracts, could manage to get better yields, as the spot market continued to be relatively more depressed.

For instance, almost the entire fleet of Essar Shipping, which reported a 186 per cent increase in its first quarter net profit at Rs 53.9 crore, is in the long-term market. “This (strategy) is keeping us going strong. A tanker on a one-year time charter, for instance, earned between $18,000 and $21,000 a day, while the same asset on the spot market could hardly get $4,000 a day,” A.R. Ramakrishnan, Managing Director of the company, said.

Great Eastern Shipping, on the other hand, has 78 per cent of its dry bulk fleet and 44 per cent of its tankers on the spot market.

“Time charter rates have not improved significantly, but (even then) we decided to fix a couple of ships at reasonable rates for three to five years period. Some of these vessels were in the Aframax asset class,” G.Shivakumar, Group Chief Financial Officer (CFO), said in a post-results analysts conference call.

TEMPORARY GAINS

The April-June quarter started off on a brighter note, both for tanker and dry bulk ship owners. Tanker rates inched up in the first half of the quarter as Saudi Arabia stepped up crude production and the Iran tension heightened, prompting refineries to tank up additional oil. But this increase in rates was soon quelled as new vessels entered the market to chase this marginal rise in demand for crude movement — there was an estimated six per cent year-on-year fleet addition. In the dry bulk segment, a slight revival in steel and minor bulk trades moved up rates for smaller vessels a tad.

However, slowdown in iron ore exports from Brazil to Asia kept the bigger ships at bay. This got reflected in the movement of Baltic Dry Index, which tracks cost of movement of dry bulk cargoes across key ocean routes. The index rose from an average of 1,021 in April to 1,101 in May and then slid to 937 in June. Similarly, in the tanker segment, rates for a very large crude carrier rose from an average of $13,348 a day in March 2012 to $17,368 in April, only to slip to $16,362 in May and $7,085 in June.

TYC LOWER

Although relatively less volatile, the average TCY (Time Charter Yield) for the quarter was also lower across segments. For dry bulk ships, the TCY slipped from $16,569 a day in the first quarter of 2011-12 to $11,076 last quarter, a fall of 33 per cent.

Similarly, product carriers saw their TCY dipping 16 per cent to touch an average $13,770 during the first quarter of this fiscal from $16,326 in the year-ago period.

For crude carriers, the fall was comparatively less at four per cent — from $20,097 to $19,302 in the first quarter of this fiscal. Ship owners see no marked improvement in rates in the rest of the year. “Overall, I think for both the dry bulkers and tankers, freight rates are going to be under pressure in the next few months,” Ramakrishnan said. In the tanker category, analysts feel that any disruption in the Strait of Hormuz by Iran could have an impact on the tanker movement in the region. OPEC expects oil demand to grow only by 0.82 million barrels a day (mb/d) in 2013, as compared to 0.9 mb/d in 2012. A senior official of Shipping Corp of India (SCI) expected the freight market to pick up only from the second quarter of 2013.

“Bunker costs have gone up substantially compared to the year-ago period. Given the current market scenario, we have done our best,” he said.

SCI reported a net loss of Rs 54.87 crore for the quarter, the second successive quarter the firm was in negative territory. Experts agree that supply of new vessels and scrapping of old vessels will play a crucial role in movement of freight rates for the rest of the year.

“Scrapping activity is continuing, but is still not a very significant number. On and off you see 16 to 17-year-old ships getting scrapped, but unfortunately scrapping activity has not really picked up.

Scrapping for the first half of the year is about 6.5 million tankers, which is not a very large number,” Shivakumar pointed out.

While on the one hand scrapping was lesser than expected, new vessels continued to join the existing fleet chasing the same cargo. It is estimated that the product tanker fleet grew three per cent year-on-year (yoy), while the dry bulk fleet saw 15 per cent yoy additions during the quarter.

ASSET PRICES FLAT

The industry has not seen any significant improvement in asset prices due to these inadequate scrapping trends.

Asset prices are mostly flat and were marginally down by five to 10 per cent only across certain segments, prompting ship owners to be cautious in their acquisition programmes.

The bottom-line for the shipping industry is thus clear — it will have to sail through a rough weather at least for some more months, before expecting clear blue skies again.

Source: Hindu Business Line. By Amit Mitra (amitmitra@thehindu.co.in). 19 August 2012

http://www.thehindubusinessline.com/industry-and-economy/logistics/article3795855.ece

Bangladesh shipbuilding goes for export growth:

When it comes to shipping, Bangladesh is known mostly as a shipbreaking nation, with dozens of ageing container vessels heading towards its southern coast for scrap. However, in recent years it has also emerged as a shipbuilding country.

Shipbuilding yards in Bangladesh are now exporting small and medium-sized ships for the highly competitive European market.

Since 2008, Bangladeshi yards have manufactured and exported ferries, cargo vessels, and ocean-going multi-purpose ships worth more than $500m (£320m). The vessels were built for countries including Denmark, Germany and Finland.

It's a small beginning compared with giants such as China, Japan and South Korea. But industry owners say Bangladesh will continue to grow because it has several advantages over rivals.

"We have plenty of skilled manpower and our labour cost is cheaper than many other countries. On average, ship owners can save at least 15% of the production cost here," said Sakhawat Hossain, managing director of Western Marine Shipyard in Chittagong.

Jobs potential

Although a number of shipyards in Bangladesh now have the capacity to build vessels for international markets, Western Marine and Ananda Shipyard & Slipways, based near Dhaka, have been leading the way in production for overseas buyers.

At the moment, they can produce ships of about 10,000 tonnes and they are working to expand their facilities to build bigger vessels.

Western Marine, which is situated on the banks of the Karnapuli river in Chittagong, is currently building a cargo vessel that will be soon be plying the icy waters of the North Sea and Baltic Sea in Europe.

The industry is aiming to win orders of more than $2bn in the next five years. If that happens, it is expected to create many thousands of jobs.

Bangladesh has more than 100 shipbuilding yards, with most of them serving the domestic market.

Experts say nearly 70% of the country's cargo and 90% of total oil products are transported by small ships, cargo vessels and tugs through its coastal and inland waterways.

Hundreds of thousands of people use ferries and steamers to travel from one part of Bangladesh to another, and most of these vessels are built in the country.

Eurozone impact

But despite the industry's strengths and promise for the future, it is also facing some external headwinds. The current economic crisis in the eurozone has had an impact.

"We have 17 ships in our order book, worth more than 200m euros ($250m). But our European buyers are not getting any finance from the banks, which have become cautious to fund new ventures at this point. So we are affected," Mr Hossain said.

However, industry owners are confident their domestic market will help to overcome the tide.

With the Bangladeshi economy growing at a rate of about 6% a year, new smaller ships and cargo carriers are needed to transport goods and other raw materials from the main Chittagong port to different parts of the country.

Neighbouring India is also negotiating full transit facilities with Dhaka to transport goods to its nearly landlocked north-eastern states through Bangladesh. Goods are currently sent through a circuitous and mountainous route along the Bangladeshi border.

Once the transit agreement is finalised, then it will be cheaper for Indian traders to send goods by ship along Bangladeshi rivers up to the border and then take them by road to the north-eastern states.

The shipbuilding industry here hopes that if the global economy recovers, then it offers tremendous potential. Experts say more than 50% of the world's ships are more than 20 years old and need replacing.

More importantly, they say countries such as Japan, South Korea and China are building very big, specialised and hi-tech ships, and they are not interested in constructing smaller vessels.

"Globally, this small and medium-sized ship market is worth around $200bn. If Bangladesh can get 1% of this market, then it amounts to $2bn," says Dr M Rafiqul Islam, from the Department of Naval Architecture and Marine Engineering at the Bangladesh University of Engineering and Technology.

However, he points out that the country's infrastructure needs to be improved to attract orders for new ships. In addition, he says, investment is needed in research and development to take the industry to the next level to build bigger ocean-going vessels.

Bangladesh has a limited number of export goods and is keen to expand its range. It hopes its young shipbuilding industry will be a key element in achieving that goal.

Source: BBC. By Anbarasan Ethirajan. 20 August 2012

http://www.bbc.co.uk/news/business-19315841

Graveyard shift:

A dying ship is scheduled to beach at the Alang-Sosiya Ship Recycling Yard. Ru drives out to a lonely spot at the northern end of the 10-km yard to find out how the ship on the horizon is holding up. He will also measure wind speed and strength of currents.

It’s not easy to guide an old ship the size of an apartment block to its final resting place in the few hours when high tides cover 11-12 metres of shore. From slack steering equipment to propellers that do not work, ageing ships tend to have all kinds of problems, including missing engines. But Ru, a shore pilot at the Alang-Sosiya Ship Recycling Yard, has guided many of these creaking giants on their last journey. “Call me Ru,” he says. He doesn’t want to reveal his name. “Someone sitting somewhere may file a case against me for working at Alang,” he says.

Unlike other ports, Alang has little navigational aids. After all, it’s a graveyard and all a ship has to do is climb onto the beach and wait to be hacked apart. However, imminent death does not make things easier. The 131 functional recycling plots at the yard always have dead ships at various stages of dismantling. The trick is to beach the new ship without banging it into the dead ones too hard and tearing apart valuable scrap metal.

Ru and the only other shore pilot work with a tool box that has just three things—a pair of binoculars, a walkie-talkie to communicate with the incoming ship’s captain and a good knowledge of the Gulf of Khambat and how it treats ships sailing into it.

Passenger ships are easier to guide as they are slim. Current or wind doesn’t drag them too much. Large oil tankers and carriers are broader and cause a lot of friction. However, both kinds have to be positioned for least resistance, which isn’t always easy because ship captains, who are from all over the world, rarely have any experience of navigating these waters. Besides, few have experience of beaching ships for dismantling.

For the past three months, Ru’s lonely spot, which he calls his outdoor office, has been hosting a six-tower oil rig called Petrobras XXIV—a structure so tall one needs binoculars to spot the bright helmets of workers cutting open its roof with blowtorches. The rig was planted somewhere in the Gulf of Mexico and was later moved to a river in Indonesia. It was towed from there to the Sosiya section of the yard where Ru, standing on the shore with binoculars hanging from his neck and a walkie-talkie in his hand, navigated the two tugs pulling it. “They have cut off the helipad and the two towers underneath. That was quite a view,” he says.

In the past 17 years, Ru has beached a large number of famous and controversial ships, including Exxon Valdez, which spilled oil in Alaska, and the 458-metre-long Seawise Giant, considered the largest ship ever built. Not surprisingly, it took 12 hours to beach and 11 months to dismantle.

Ru earns a fixed amount of Rs 10,000 for each ship he beaches, irrespective of its size, from the Ship Recyclers’ Association. The economic slowdown has been rather good for him. “Ships are like trucks,” he explains. “When there’s cargo to be hauled, they bring good money. But when there’s no trade, they just stand around, and you have to feed the crew, maintain the ship, pay all kinds of fees, including loans. So owners sell them off to scrap, and many of them come here.”

The mainstay of the Alang economy is the annual 400-million-tonne recycled steel. The yard also feeds hundreds of shops on a 10-km stretch of road which sell furniture, antiques, navigation equipment, speed boats, life rafts—almost everything ships carry.

Since tides won’t wait for Ru and his colleague, they have to work hard and sometimes even forgo sleep. Night tides are as valuable as those in the day. Ru does not mind guiding ships past midnight when there are no workers cutting scrap metal on the plots or cranes and trucks shifting material. Just the night, the sea, a ship and silence. Well, sometimes not silence. “I was standing on the shore one cold December night, waiting for the tide to reach its peak. Suddenly, there was this awful noise, jhuk-jhuk-jhuk-jhuk. I pulled my binoculars up and looked out towards the sea, and I saw this ship I was waiting to beach about two nautical miles out, moving in fast towards the shore. Its mast was swaying left and right, like a bottle in water, and making that sound, jhuk-jhuk-jhuk-jhuk. I radioed the captain, and he said two of the four propellers had stopped working, “but no problem”.

“Sometimes these captains... they don’t say anything. Filipinos are wonderful to deal with, they are masters of the sea. The Greeks think they are masters of the sea. Europeans are okay. Chinese are so particular they will ask a thousand questions. And the Russians, they say, ‘no problem, no problem’, and then bam! boom!”

Source: Indian Express. 19 August 2012

http://www.indianexpress.com/news/graveyard-shift/990063/