AHMEDABAD: A slowdown at the country's largest ship-breaking yard , Alang, has pushed up scrap steel prices by Rs 1,000 per tonne in two weeks. Simultaneously, steel demand from infrastructure sector has been sluggish, say traders. "Few ships are coming for demolition in the ship yard owing to a good freight market in the sub-continent . Also with Bangladesh reopening the ship breaking industry after 10 months of closure, there has been a slowdown ," said Ship Recycling Industries Association (India) joint secretary Jayantbhai Vanani.
Monthly on an average 30 to 35 ships dock at Alang for breaking, which has now come down to 20 since the past few months, he added. The Baltic Dry Index, after touching 1045 points during the Japanese earthquake and tsunami, has now started improving to 1350 to 1400 points, added Vanani. Ship cost, which was ruling at $460 to $475 per tonne, has been hiked to $510 to $520 that were not matching with local prices.
Mandi Gobindgarh-based trader Chajju Ram said the prices of melting scrap have increased by Rs 500-Rs 1,000 per tonne in a fortnight, touching Rs 23,000-Rs 24,000 per tonne. Further, re-rollable steel material (plates) are being sold for Rs 25,000 to Rs 27,000 per tonne. The average daily dispatch of scrap steel from Alang has fallen to 8,000 tpd to 10,000 tpd. Steel supplier Mahavir Steels owner SK Gupta said due to shortage of melting scrap, iron ore, coal steel prices were increasing .
"There is no demand for finished products like building material (TMT bars, round bar, structure for fabrication etc., ), leading to unstable prices," he said. However, the industry trackers feel that the prices would remain stable for the next 2-3 months and then see a correction . Bhavnagar-based Leela Ship Recycling MD Komal Kant Sharma said even though the numbers of incoming ships were less, they were large ships of 10,000 to 15,000 tonne. "All four major ship recycling yards -- China, Bangladesh, India and Pakistan -- which do 97% of the global ship breaking business, are currently active .
From May 1 to till date, 21 ships have been beached on the shore, ready for demolition and 13 are awaiting at Alang . We expect a downfall of 5% to 7% in ship prices by next quarter that-might make an impact on steel prices,"he said.
12 May, 2011
The importance of ship breaking as a potential source of raw material for the re-rollers was recognized in early 80’s. As a result, import of ships for breaking was accelerated. Prior to 1979 the Ship Breaking activities in India was limited to breaking of barges, small sized ships and casualty ships. It was concentrated in two major parts namely Mumbai and Calcutta.
Due to increase in trend of import of ships for breaking in India, an emphasis was laid to examine various sites suitable for this activity. Amongst various methods of Ship Breaking, the beaching method depends on skilful harnessing of zero cost tidal energy at sheltered coastal locations and warrants the least capital investment. Considering the favorable parameters for beaching method like high tidal range, firm seabed, gentle seaward slope etc., it was decided to set-up a ship breaking yard on the western coast of Gulf of Cambay near Alang village. The first vessel – MV KOTA TENJONG was beached at Alang on 13th Feb. 1983. Since then, the yard has witnessed spectacular growth and has emerged as a leading ship Breaking Yard in the world.
Breaking of ships on such a large scale would obviously necessitate extensive care on issues like physical and social infrastructure, worker safety and welfare, environment management, establishment of down stream and ancillary industries etc. These involve not only the financial resources but also many others influencing factors viz. proper knowledge base, compatibility of mindset between workers and the ship recyclers, availability of land and negotiation skills for legal issues. GMB as a regulator has put in sincere efforts to develop above requirements to accelerate the growth of this industry.
Alang located on the western coast of Gulf of Cambay, in the western part of India, is the largest ship-recycling yard in the world. Ever since its inception in 1982, Alang has emerged as one of the choicest ship-scrapping destinations for the ship owners around the world. Hundreds of ships from all over the world find their final resting place in Alang every year.
There are 173 plots to carry out the ship-recycling activities. This activity forms an industry by itself, as it provides around 30,000 jobs in Alang itself and generates steel totaling to millions of tons every year. That too, with minimum consumption of electricity. If we examine these bare facts from the ecological point of view, it amounts to saving of huge amount of non-cyclic and precious mineral reserves like coal, petroleum etc. It is therefore, one of the most lucrative industries as also contributing to ecological balance.
Millions of tons of steel is recycled by re-rolling mills. Many mechanical spares find their applications in one-way or other. Various electrical components hold special value for the fixed set of customers. And the list goes on. A truly strong platform then, to promote re-usability of products, which are otherwise considered to be SCRAP. Also deserves special compliments, as many of these do not require re-processing and so no incidence to consume power and water.
The present recycling facilities in the world are sufficient to take care of the world recycling requirements now and also in the future and as such further facilities may not be required to enhance the capacity. In fact, presently, there are not adequate ships at the recycling facilities as mentioned earlier and enough spare capacity is available. Hence, there seems to be no necessity to enhance the present ship recycling capacity. All hazardous materials on board the ship which are not required for final voyage should be removed prior to delivery of the ship for recycling.
The capacity available for breaking ships in the world was estimated in 2005 at around 12 m.ldt (million light displacement tonnes) whereas ships coming to the ship demolition market have drastically come down to around 2 m.ldt. Since 2002, the availability of ships for demolition reduced from the level of 28.0 m.dwt (million dead weight tonnes) in calendar year 2002 to 4.5 m.dwt in the current year as on 11th November, 2005. India’s share has also slipped from 10.8 m.dwt in 2002 to about 1.0 m.dwt in the current year till 11th November, 2005 while that of Bangladesh has slipped from 8.8 m.dwt in 2002 to 2.9 m.dwt in the current year. This has reflected in exorbitant rise in the prices of ships coming for demolition at about US$350/ldt, as against the melting steel scrap price of about US$230/tonne.
In terms of weight in Light Displacement Tonnage (ldt), world shipbreaking amounted to 6.5 m.ldt in 2002 which has come down to about 2 m.ldt in the current year. India’s share has been 2.7 m.ldt in 2002 which has come down to about 0.5 m.ldt in the current year till 15th November, 2005.
Scrap recovered from ships is used as re-rollable scrap and melting scrap in Asian countries where scrap-based re-rolling mills are operative. In developed countries, such scrap recoveries are used as melting scrap only fetching about US$50/tonne less than the prevailing melting steel scrap prices. Thus, it is seen that there is no question of shortage of dismantling capacity. Rather, there is need to reduce the excess capacity by eliminating the casual ship recycler who compromises the regulations, by strictly implementing the environmental and occupational hazards rules.
The 1992 Basel Convention on the control of transboundary movements of hazardous wastes and their disposal, control and regulate the import of hazardous wastes into the country. India is a party to the Basel Convention. It signed the Convention on 15.3.1990, ratified it on 24.6.1992, and acceded to the Convention on 22.9.1992. Import of such wastes may be allowed for processing or re-use as raw material, after each case has been examined on merit by the State Pollution Control Board.
Current shipbreaking is centred primarily in Pakistan, India, Bangladesh and China. Almost all vessels, with few exceptions, are broken up at beach facilities. Compared with standards or general norms expected within the industrialised countries, current methods of ship dismantling fail to comply in many aspects. Insufficiencies related to the adopted procedures include, but may not be limited to precautions, training and awareness and to facilities available. Furthermore, the implementation of measures for improvement will affect not only the ship-dismantling facility but may also raise issues relating to procedures prior to dismantling, as well as to the destiny of the waste or material streams derived from the extraction process. Problems generated by the insufficiencies of current ship-dismantling practices have consequences for not only the environment but also for occupational safety and health of the workers.
By occupying and expanding the areas required for breaking, the dismantling industry affects both the local surrounding, environment and society. The established local community may be relying on basic industries such as fishery and agriculture, hence conflict of interests may become an issue. Discharges and emissions to sea, ground and air cause both acute and long term pollution. The lack of containment to prevent toxins from entering the environment is a major concern.
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