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.
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.”
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.
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