Import of old ships for
scrapping fell 20 per cent in July-April period of current financial year, due
mainly to slow pace of public and private development work, officials and
industry insiders said.
Local importers
purchased old ships weighing 1.65 million tonnes in the current financial year
(FY) against the import of 1.9 million tonnes in FY2013-14 and 2.35 million
tonnes in FY2012-13, data from the National Board of Revenue (NBR) showed.
"Low demand in the
local market and higher prices of old ships in the international market brought
down import of the primary input of re-rolling mills significantly in recent
years," Sheikh Hafizur Rahman, an importer of old ships, told the FE.
"The prices of old
ships increased by around 15-20 per cent, while demand in the re-rolling mills
decreased drastically at the same time because of slow development work both in
public and private sectors," he added.
"Importers are
reluctant to import increased number of ships as higher prices of old ships in
the international market and its lower demand among the domestic re-rolling
mills."
Prices of an old ship,
on a per tonne basis, jumped from less than $450 two years ago to US$530 now in
the international market, Mr Rahman said.
Showkat Ali Chowdhury,
owner of Namrin International, the country's one of largest ship-breaking
yards, said the business expanded rapidly till 2011 because of lower prices of
old ships in the international market and higher development work within the
country.
But he added investment
in the private sector has remained almost stagnant for the last couple of years
for political instability and high bank interest rate, which pushed down demand
of scraps in the country.
Old ships are the main
source of making construction steel in Bangladesh. The country's re-rolling
mills melt it after dismantling large slabs of steel.
The ship scrap is used
to make 40-grade mild steel (MS) rod, which has a major market in the country's
housing sector.
Ship-breakers supply
around 80 per cent of the country's annual demand of raw materials used in
rerolling mills, which are met from scrap ships.
Mr Chowdhury said local
importers have added 27 more shipyards bringing the number to 77 to cope with
the increased number of old ships being imported in the country earlier.
In the past, there were
only 36 active ship-breaking yards in Sitakundu, 20 kilometres north of the
port city Chittagong.
These yards used to
dismantle 110 ships on an average every year. But in recent years, the number
came down to around 80 to 90, he informed.
"Our importers used
to beach four to five ships each week and would finish cutting the same number
a week, but now-a-days there are many yards which cannot cut a ship even in
three months," Mr Chowdhury said.
Since fiscal 2011,
Bangladeshi breakers broke nearly 60 per cent of the ships sent to scrap-yards
from across the globe, which is now gradually going down mainly because of poor
market demand, said Abu Ahmed Shikder, a leading ship breaker.
He expressed the hope if
the current political stability continues, then the demand for investment by
the private sector would increase and the development work by the government
will also be strengthened and thus activities at the ship breaking sector will
start at a full swing.
According to industry
insiders, India breaks around 1.5 million tonnes a year, while China does 1.3
million tonnes, Pakistan does 1.0 million tonnes and Turkey around 0.60 million
tonnes.
Source: the financial express.
31 May 2015
http://www.thefinancialexpress-bd.com/2015/05/31/94773
