The plague of scrap-metal thefts currently affecting many countries might be seen as good news for ship owners:

The plague of scrap-metal thefts currently affecting many countries might be seen as good news for ship owners hoping to get the best price for their surplus tonnage.

The phenomenon of such thefts that have targeted copper used in telephone cables and rail signalling systems and even brass plaques in war memorials is not new, but the number appears to have risen in response to high demand and prices for virtually all metals.

Demand has remained high, despite the global economic weakness and uncertainty. World steel production, for example, increased last year by almost 7% to 1.5 billion tonnes and this, combined with the high cost of raw materials such as iron ore, has helped sustain prices paid by shipbreakers. This month they exceeded USD 500 per light displacement ton (LDT) in the key demolition areas in the Indian sub-Continent, offering owners an incentive to dispose of over-age and uneconomic tonnage.

While China continues to dominate global steel production with output in 2011 of 695 million tonnes or a 45% share, according to the World Steel Association (WSA), the European Union (EU) should not be ignored. Production by its 27 members last year was 177 million tonnes (a rise of almost 3% on 2010), implying, the WSA calculates, the use of over 3 billion tonnes of raw materials, the vast majority of it imported by sea. This, the WSA says, is equivalent to 2,400 voyages by Capesize vessels a year.

Assuming the Eurozone crisis can be contained and emerging economies, especially China, continue to experience “healthy” growth, the WSA is forecasting steel production will rise again this year. Steel producers will continue to pay high prices for iron ore and this in turn will sustain the incentive to use steel scrap, so helping keep the prices paid by shipbreakers at their current levels, while burnishing the steel industry’s image for recycling. It claims scrap accounts for half the raw materials used in production with annual demand at 500 million tonnes and that it is less energy-intensive. World trade in steel scrap is estimated at around 100 million tonnes a year and demand is forecast to rise substantially over the next 5 years.

With a similar picture of sustained recovery in demand for other metals, the incidence of scrap-metal thefts is likely to remain high but what none of the thieves has yet targeted is the tin drum beaten so hard by those who continue to condemn the process which ship owners use to dispose of uneconomic vessels. The monotonous drumbeat was heard this month when the NGO Shipbreaking Platform published its latest annual list of ships “dumped” by European companies in Asia.

The list, compiled from a number of sources reporting the sale and arrival at breakers’ yards, claims 210 ships controlled by EU-based companies were delivered to the sites at Gadani in Pakistan, Alang, Sachana and Mumbai in India and Chittagong in Bangladesh. Greece tops the list with 100 ships, followed by Norway (24), the UK (13), The Netherlands (12) and Germany (11). By flag Panama, unsurprisingly, heads the list with 55 ships, followed by Liberia (33), Bahamas and St. Kitts & Nevis (12 each), Comoros (11) and Marshall Islands and St. Vincent & Grenadines (7 each).

The NGO, whose membership includes campaigners for human rights and a ban on asbestos, notes that, with single-hull tankers facing the regulatory axe and the “current backlog of old vessels still in operation”, the number of ships being recycled is reaching an “all-time high”. Indeed, preliminary figures suggest last year may have seen the highest amount of tonnage sold for demolition.

It called on the European Commission (EC), which it says is due in March to release proposals, to take action by enforcing the directive on hazardous waste shipments against ships. This is despite the fact the EC has previously acknowledged the problems in doing so are virtually insurmountable and now seems to prefer to wait until the Hong Kong Convention on ship recycling, adopted by the International Maritime Organization (IMO) in 2009, comes into effect, although this may not be until perhaps 2015.

The drum-beaters also seem to ignore the “paradigm shift” in global policies on waste which see it as a potentially valuable resource and recognise that the existing regime under the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal is outdated in its emphasis on “north-south” trade. The amount of electronic waste such as mobile ‘phones and laptop computers generated by developing countries, for example, is forecast by the Basel Secretariat to exceed that of members of the Organisation for Economic Development and Co-operation (OECD), i.e. developed countries, by 2018.

This attempt to modernise the Basel Convention comes as the long-running controversial question of whether ships are covered by the international treaty on hazardous waste appears to have been settled in favour of their inclusion in the IMO convention.

Yet the NGO persists in arguing ships, as far as the EU is concerned, should be treated as hazardous waste shipments and is calling for a European policy “that gives promise of effectively reversing the current trend where end-of-life ships constitute one of the largest streams of toxic waste dumped by European companies in developing countries”.

The ambiguous phrase “gives promise”, however, suggests that a note of realism has been added to an otherwise idealistic ambition. The NGO also gave its stamp of approval to a decision by Exxon Mobil late last year to recycle one of its tankers (built 1984) in purpose-built facilities in the US.

They may claim that, even if the outcome is the introduction of the IMO’s Hong Kong Convention on recycling, which they have denigrated in particular for failing to outlaw the beaching method used by shipbreakers, their sustained campaigning in highlighting the perceived environmental and safety issues has achieved at least partial success.

They may not be prepared to hang up or even recycle their tin drum just yet, but the drumbeat is beginning to sound a little more hollow each year.

Source: Balkans.com (Sourced from BIMCO). 27 January 2012

http://www.balkans.com/open-news.php?uniquenumber=133866