Bangladesh concedes shipbreaking crown to India:

The wait for necessary paperwork and approvals continues to frustrate Bangladesh’s ship recycling industry.

THE biggest change for the ship demolition sector this year has been the changing picture of where owners can sell their ageing ships, after buying activity from the largest shipbreaking nation froze. Uncertainty still surrounds the Bangladeshi ship demolition sector 10 months on from the country’s Supreme Court banning breaking yards from importing vessels that had not been pre-cleaned of toxic materials.

Between 17-25 facilities of the 63 shipbreaking yards thought to be operational in Bangladesh’s ship recycling hub of Chittagong have been granted approval in the past month to buy vessels. Around 20 ships have since been beached after passing the requirements of 4 governmental departments. But still none have yet started the cutting process as more paperwork and approvals are necessary.

It was predicted in October that 60% of the migrant workers who cut vessels in Bangladesh’s shipbreaking yards had lost their jobs, estimated at around 16,000-17,000 people, as there was no steel left to cut.

Ship demolition brokers say owners are still asking about Bangladesh — historically the country offers the highest scrap price per ldt. However, the uncertainty and controversy surrounding the Chittagong industry has meant many are dissuading their clients from pursuing the country as a recycling destination and instead are promoting rival breakers in neighbouring India and Pakistan. This shift in the demolition market has allowed Pakistan, which had been overshadowed by its neighbours for years, to show how well it can perform once aggressive Bangladesh scrap prices are taken out of the equation.

So far this year, breakers in Gadani have bought 101 ships, totaling 835,730 ldt, according to Greek broker N Cotzias Shipping. This includes 41 dry cargo vessels, which is down on the 69 Pakistani breakers bought in 2009. But the big change is that Pakistan has absorbed the wet tonnage — tankers and gas carriers — that Bangladesh would have traditionally bought up.

The number of wet cargoships purchased by Gadani breakers has more than tripled, with 57 vessels sold to Pakistan this year, compared with just 17 last year.

In comparison, by the end of November Bangladesh had imported less than half of the total tonnage it bought for recycling in 2009. N Cotzias reports Chittagong breakers have purchased 102 vessels this year, totaling 1.2m ldt, compared with 208 ships of 2.3m ldt last year.

Even India, which traditionally specialises in dry cargoships such as bulk carriers and containerships, has increased the volume of wet tonnage it has imported. Of the total 431 ships of 3.1m ldt India has bought this year, the country has taken in 132 wet cargo vessels of nearly 1.1m ldt. This is up from just 55 of 526,463 ldt in 2009, the N Cotzias data shows.

Whether Bangladesh will retain its title as the destination of choice for tanker tonnage in 2011 is still out for debate, but with its rivals getting their foot in the door this year it could prove a lot harder to compete for ships in the future.

Source: Lloydslist. Tuesday, 14 November 2010

http://www.lloydslist.com/ll/sector/regulation/article352353.ece