The coronavirus pandemic has hampered recycling capacities at Gadani Ship-Breaking Yard as well as other yards of South Asia, according to GMS, the world’s largest cash buyer of ships for recycling.
Pakistan tightened domestic restrictions this week and in Gadani, activities at ship recycling yards have been suspended for the time being, similar to the present situation in India where all yards have closed and oxygen supplies are being diverted to local hospitals, in order to assist with the dire situation that’s currently unfolding.
Notwithstanding, sales continue to take place into all markets and customs activities for the boarding and beaching of ships is still ongoing. With steel plate prices rampant across the industry, it is unsurprising to see local demand and offers being maintained for the time being.
India has experienced severe shortages of purified oxygen due to its ongoing second wave of Covid-19 infections, and this has drastically curtailed the country’s ship recycling activity. The outbreak has caused over 250,000 deaths in the country, and oxygen shortages are partly to blame. As industrial oxygen is diverted for medical purposes, the shortage has heavily affected Alang, the world’s largest ship recycling district.
Since many ports around the world have banned seafarers who have recently visited these countries, it has become increasingly difficult to make ship deliveries to Gadani, Alang, and Chittagong, according to GMS.
Turkey, another key name in the ship recycling scene, is also under lockdown until May 17 in the face of rising Covid-19 infections.
Nonetheless, GMS reports that recycling prices are bearing up, led by Bangladeshi shipbrokers. They are paying up to $500 per light displacement tonne for bulk carriers, $510 for tankers, and $520 for container ships – far more than the prices paid in years past.
In Turkey, the prices are running at $250, $255, and $260 respectively, according to GMS.
Recently, Indian shipbrokers paid $16 million for the 130,000 dwt FPSO Berge Helene. The ship was built as a tanker in 1976 and was converted into an FPSO in 2005 in Singapore. The ship will be recycled in line with Hong Kong Convention requirements, with owner BW reportedly agreeing to pay an HKC compliance bonus to the Priya Blue recycling facility in India. Demolition will be supervised by a specialist consultant, Grieg Green.
