Just 10% of demo yards in Alang have any tonnage to dismantle

A protracted downturn in the ship recycling sector sees just 10% of yards in Alang – the world’s top demo area – with any tonnage to be dismantled. As a result, Clarksons Research is reporting the local workforce has diminished significantly at the site on India’s west coast. 

“Against the backdrop of strong shipping markets in many sectors, partly due to the disruption to shipping through the Red Sea, the lack of recyclable tonnage finding its way to demolition yards looks set to continue for the remainder of 2024,” Clarksons noted in its most recent weekly report. 

Other major ship recyclers including Pakistan, Bangladesh and Turkey are also struggling with limited tonnage and prices have dropped significantly to well below $500 per ldt. 

“Overall, the ship recycling industry is navigating a tough period with widespread uncertainty and limited prospects for immediate improvement,” cash buyer Best Oasis noted in a market update. 

The situation has been made worse by the extraordinary amount of cheap Chinese steel flooding the markets in countries including India and Pakistan. 

“As cheaper Chinese steel imports cause concerns in India and Pakistan again, further anti-dumping duties are clearly needed in order to curb cheaper steel imports from undercutting inventories at domestic ship recycling yards, further creating economic hurdles for local ship recyclers,” GMS, another cash buyer, suggested in a recent report.

India’s cabinet is soon expected to vote on a transformative shipbuilding policy aimed at strengthening the country’s role in the global shipbuilding and ship recycling sectors. The proposed policy includes a recycling credit note scheme that offers fleet owners a 40% credit on the scrap value for ships dismantled in Indian yards. 

“By linking ship recycling with new vessel construction, the policy is designed to create a sustainable cycle, boosting both sectors,” Best Oasis noted. 

source: splash247