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Recycling markets rebound as scrap prices strengthenRecycling markets rebound as scrap prices strengthen

Recycling activity across the world’s four ship demolition regions strengthened last week following Eid holidays and rising prices for scrap steel.

Paul Bartlett, Correspondent

August 18, 2020

2 Min Read
GMS RSRP
Photo: GMS

Despite the continuing impact of Covid-19 and rising infection rates in India and Turkey, prices are markedly higher on recent deals with Pakistan firmly leading after its two-year absence. Meanwhile, the world’s leading cash buyer of ships, GMS, reports that loss-making inventories that have been held for months are being sold off as prices firm.

Reports surfaced that a panamax container ship was being negotiated in Gaddani at a price in the $360s whilst prices in India’s Alang were about $20-25 higher per light displacement ton (ldt) over the week. This took typical prices there to $350 per ldt for containers, $340 for tankers and $320 for bulk carriers. Pakistan recyclers were paying a premium of about $10 per ldt above these levels. Chattogram was less busy and prices were about $20 per ldt below Alang.

GMS noted that although Turkey’s six EU-approved facilities are full, largely with cruise vessels, Aliaga yards that are not EU-approved were paying higher prices for non-green tonnage. Prices broke through the significant $200 per ldt threshold and were heading towards $220.

Meanwhile, GMS has produced a paper seeking to counter criticism over the beaching method of recycling end-of-life vessels, a procedure currently used for 92% of ships. Over the last four years, almost 80 of India’s 120 recycling facilities have been awarded Hong Kong Convention Statements of Compliance (SoC) following audits by classification societies including ClassNK, IRClass, Lloyd’s Register and RINA. The first yard in Chattogram was awarded a SoC in January of this year.

Related:Ship recycling – early signs of fresh activity

Furthermore, GMS pointed out, a long list of blue-chip shipowners including China Navigation, Maersk, NYK, Teekay and Transocean, amongst others, have visited, vetted and approved Alang yards. Recyclers there have invested substantial capital in upgrading facilities to install impervious floors, robust drainage and waste disposal systems, heavy lift cranes, yard and vessel-specific training for workers, and the development of Ship Recycling Facility Plans and Ship Recycling Plans as set out in IMO guidelines.

“The institutions that have been tireless in criticising South Asia’s yards have deliberately remained blind to the tremendous improvements that have taken place there,” GMS said in its paper. “Such large-scale development cannot be shrugged off with baseless statements that the beaching method is toxic, and blatantly false statements that all yards in South Asia are the same, irrespective of their level of advancement.”

Related:GMS hits out over BBC documentary on ship recycling industry

Furthermore, the fact that several of the 20 Indian recycling yards that have applied to the European Commission for inclusion on its approved list of facilities are now undergoing EU audits indicates that they must have passed the preliminary requirements to merit possible inclusion under the EU Ship Recycling Regulation, GMS said.

About the Author

Paul Bartlett

Correspondent

UK-based Paul Bartlett is a maritime journalist and consultant with over four decades of experience in international shipping, including ship leasing, project finance and financial due diligence procedures.

Paul is a former Editor of Seatrade magazine, which later became Seatrade Maritime Review, and has contributed to a range of Seatrade publications over the years including Seatrade’s Green Guide, a publication investigating early developments in maritime sustainability initiatives, and Middle East Workboats and Offshore Marine, focusing on the vibrant market for such vessels across that region.

In 2002, Paul set up PB Marine Consulting Ltd and has worked on a variety of consultancy projects during the last two decades. He has also contributed regular articles on the maritime sector for a range of shipping publications and online services in Europe, Asia, and the US.

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