Shipbreaking shows signs of gradual reopening

The shipbreaking industry in the Indian sub-continent is starting to exhibit some signs of phased reopening following weeks of shutdowns caused by the Coronavirus.

However, the reopening doesn’t mean the pandemic is over, far from it, as the subcontinent continues experiencing infection cases. What is more, India reported a spike in daily infection cases that reached 8,000 on Saturday, May 30.

The total infection tally in India has passed 173,000 since the country announced its nation-wide lockdown at the end of March.

The countries in the region are starting to reopen cautiously as their economies have also sustained a massive blow and can no longer sustain the pressure.

Even though India appears to be closed for shipbreaking by what is expected to be June 15th, vessels have started arriving in Bangladesh.

“Presently, Bangladesh is the only subcontinent location that has started to permit new ships with the foreign crew to beach and these crew will then have to stay in a hotel (not on board the vessel on the beach) until such time as international flights resume,” GMS said in its weekly update.

According to Clarksons Platou Shipbroking, agreements are being made to allow tonnage with foreign nationals on board to be delivered to yards in India following much pressure from local industry players.

During this period, ships have been delivered to yards in India provided they only contained Indian crew.

The same practice would be put in place, where foreign nationals would be taken to a hotel for a 14-day quarantine and undergo medical checks and testing, in order to prevent the disease from spreading further.

“These are small steps but finally some progress is being made with these sensible provisions now in place to ensure the industry can operate to some scale during the pandemic,” Clarksons said.

Despite the above restrictions encountered, several cash buyers have been actively busy trying to develop some business with some sales being reported at improved numbers from where they were a couple of weeks ago.

These include New Athens, a bulk carrier built in 1999 in Japan, being sold for $310 per LDT, for scrapping in Pakistan. However, there remains the issue concerning the crew arrangements on arrival to this Pakistan as currently, no beaching is still allowed to take place, Clarksons said.

Rumour has it that Costamare of Greece sold the largest containership to be recycled as the wide beam 1997 built panamax container Kokura (33,100 LDT) at region $330/LDT, whilst the smaller container Grand (5,645 LDT) managed to fetch $280/LDT basis an ‘as is’ Singapore, data from GMS shows.

“Since the terms and conditions of the sale were private, the prices reported could be inaccurate. However, since Costamare have historically committed their units basis strictly HKC green recycling, the units are expected to head towards Indian shores,” the cash buyer pointed out.

GMS expects Pakistan to allow foreign crew in from this week, in the next step towards easing restrictions. However, as explained by the cash buyer, since this is new territory for most, things are not expected move quickly.

“Finally, restrictions in Turkey, like the subcontinent markets, are expected to ease in the coming week as well, but with prices still suspended well below $200/MT, we do not anticipate much activity from this market,” GMS said.

“Time will tell whether the lockdown and restricted procedures would have been eased on their arrival to the waterfront and, how what sentiment the actual recyclers adopt,” Clarksons added.

The lockdown has had a major impact on the shipbreaking workers, especially the migrant workers, who have been deprived of accessing government support, NGO Shipbreaking Platform said.

According to the platform campaigning for safe and clean recycling, many on these workers have not been paid their March salaries, and due to the lockdowns they have been unable to return to their home villages, having to continue to pay rent for the unsanitary and improper accommodation near the shipbreaking yards.

“Given this unprecedented emergency situation, we decided to act. Thanks to the financial support received via our call for donations, our local member organisation OSHE Foundation managed to distribute food and personal protective equipment items to 130 of the most deprived shipbreaking workers’ families,” the platform said.

The NGO claims that Chattogram remains closed, while some yards have re-started cutting operations that are not paying properly, while the government assistance remains negligible compared to the need.

The situation at the shipbreaking yards in Bangladesh is also said to be dire, as workers are not paid or provided support during the COVID-19 lockdown, lacking completely lacking a safety net, both from employers’ and government level.

“With the food packages distributed by OSHE, at least the workers are not compelled and exploited to go back to the yards and risk exposure to not only the extremely contagious COVID-19 virus in a society where many are deprived of accessing proper medical care, but also to the many dangers shipbreaking involves,” says Sara Rita Da Costa, Project Officer at the NGO Shipbreaking Platform.