On Monday 20th of April 2015, Michael Grey of Lloyds List published the article "Name-calling bullies" where he outlined his opposition to the idea of banning beaching and gave reasons why such a decision would be impractical and unethical for the ship recycling industry.
In fact, throughout his article he stressed the improvements of safety and environmental standards which have taken place in facilities in the Indian subcontinent and highlighted the fact that these improvements had been witnessed during a fact-finding visit to Alang, India, by a delegation of Japanese industry and government officials organised by GMS. To quote the article directly:
"The visit, which was organised by the cash buyer Global Marketing Systems, was able to see the improvements that were being made and which could be more widely spread around the whole subcontinental recycling sector.”
In his article there are few other arguments worth highlighting, including that if the decision is taken to ban beaching, there would be a limited capacity of yards to carry out recycling; IMO's efforts through the Hong Kong Convention to promote the safe and environmentally sound recycling of ships; and the 40,000 jobs associated with the industry of ship recycling in the Indian subcontinent.
On the 1st of May 2015, Adam Corbett wrote in TradeWinds (Volume 26 / Number 17) that "Belgium opposes the Brussels ban on beach scrapping.” Throughout his article similar opinions as the aforementioned one were expressed.
It is evident that the industry has already taken notice not only of the developments which have taken place in ship recycling facilities which practice environmentally sound beaching methods, but also of the necessity of such facilities to not be excluded from the EU regulation around ship recycling.
The Rising Standards of the Indian Subcontinent
With the raising of ship recycling standards in the Indian subcontinent spreading, and key players in the industry becoming aware of these improvements in the region, the resistance to the European Commission’s (EC’s) possible ban on beaching is steadily increasing.
Consequently, Corbett states that "In a letter to Karmenu Vella, European Commissioner for Maritime Affairs and Fisheries, Belgian Environment Minister, Celine Fremault, said she was keen to see that bad practices in beaching are stopped, but explained that it would be outside the scope of the SSR (Ship Recycling Regulation) to implicitly ban one method of demolition."
The tide seems to be turning against those who are opposed to beaching without being willing to witness the facts for themselves. It is evident that there are facilities capable of complying with internationally acceptable standards and regulations in the Indian subcontinent, and this seems to be increasingly recognised as highlighted by Celine Fremault’s statement quoted by Corbett as follows:
"We would like to formally request that all ship recycling facilities in third countries will be assessed individually, based on the requirements of the regulation and guidance in line with the regulation, taking into account the specifics of the recycling state and recycling method used."
“Alang is not just Alang”
GMS, in coordination with a Danish Shipowner arranged for a study visit by vetting of ship recycling facilities in Alang. The visit which took place in April 2015, included representatives from the Danish Shipowners' Association (DSA) who witnessed the ship recycling practices which are actually taking place locally.
Following up to this study visit, the Director of the DSA, Mrs Maria Bruun Skipper, wrote that "Alang is not just Alang" from which it was acknowledged that some of the yards have "undergone a positive development in order to comply with the requirements that will be set by the forthcoming Hong Kong Convention". Going into more detail, Skipper highlighted in her article that:
"We consequently saw, among other things, workers wearing safety equipment and undergoing six-monthly routine medical check-ups. We also noted that the shipyards were engaged in operations such as asbestos handling, and regularly compiled reports from water and soil pollution tests etc. Finally, we were able to personally observe that three of the shipyards had laid a concrete base beneath the beach to stop seepage of harmful substances."
Having witnessed the facts in Alang, it appears that the DSA has recognized the need for ratification of the Hong Kong Convention, and the necessity for the European Union to be cautious from excluding a place such as Alang because of the bad reputation historically.
Finally, it was worth highlighting that those who have visited Alang, have immediately changed their (negative) views, and this is also evident in the DSA statement, “Our visit was just one visit, but also an eye-opener that ’Alang is not just Alang”.
For more information about the DSA visit and rest of the comments please visit https://www.shipowners.dk/en/presse/nyheder/alang-is-not-just-alang/
European Commission Officials Need To Visit Improved Alang Yards
GMS would like to draw your attention to Corbett's statement that "The EC is yet to visit breaking yards that have made significant improvements". With that in mind, it would be encouraging to see the EU and India coordinating a direct dialogue for a fact finding mission aiming to promote cooperation and awareness, as was recently conducted between India and Japan. Of course, GMS would be willing to facilitate such a delegation at any time.
GMS and Responsible Recycling
GMS has the expertise and resources to guide owners regarding the quality of various yards in different countries, including Turkey, China and India. GMS has been actively trying to promote responsible ship recycling practices for a long time. It is therefore to our satisfaction to see that the industry is taking notice of the need to work jointly, towards encouraging continuous developments, especially when it comes to environmentally sound and friendly recycling practices. One of the best ways to achieve this is by rewarding facilities which are setting high Corporate Social Responsibility standards.
The brief spurt in raw material and steel prices witnessed over the last 3 days in India's secondary sector steel market, up on sentiments rather by increased demand, sputtered on weekend removing hopes of recovery in last leg of financial year
Price level of input material as well as finished had made rally over the last 3 days unexpectedly. The rally was primarily seen as firming up of domestic sentiments on the back bottoming out of iron ore and scrap levels in the international market.
Sponge iron price declined at all major locations by INR 100 to INR 200 per tonne due to oversupply and weakening sentiment in finished market.
Scrap price levels remained firm though since IF's indulged in stock replenishment in anticipation of further price increase. However the price levels at Alang for ship breaking and plate cutting scrap dipped.
Pencil ingot price levels corrected at most important locations since there was no significant buying of finished. The rally witnessed in the last couple of days was purely speculative trying to give the market break but not supported by demand.
Rebar market remained quiet with corrections at select locations. Structural steel price though lost at Ahmedabad, Indore and Kolkata.
The world’s last surviving single-hull VLCC is set to make its final voyage to the breakers, market sources said this week.
SBM is said to have sold the 265,000-dwt Alba (built 1989) “as is” in Labuan, Malaysia.
Market experts are placing a price in the region of $10m on the vessel, which has been at anchor at the famous layup spot since June 2011.
SBM purchased the ship as Albatross from Greek owner Dynacom in a $25m deal in April 2011, with the tanker slated for conversion into a floating production, storage and offloading (FPSO) unit.
The scrap sale comes just a week after market speculation suggested the Alba, which was built by Hyundai Heavy Industries, was set for a final lease of life.
Potential storage deal
Rumours were linking the vessel with a trading sale, with a view to securing a storage contract as traders exploiting contango in the oil price fixed a flurry of VLCCs.
Storage has already offered a stay of execution to one VLCC this year, with Global Marketing Systems (GMS) fixing out the double-hull, 297,000-dwt Progress (ex-New Progress, built 1994) on a 12-month storage contract last month.
That pact, described by tanker-market sources as a “great deal” for GMS, was priced at $36,000 per day. The cash buyer had bought the tanker from Greek owner New Shipping last October in a scrap sale.
According to data from EA Gibson, the previous single-hull VLCC to be scrapped was the 282,000-dwt Southernpec 3 (built 1991). TradeWinds reported that vessel fetched $6.8m in March last year.
The last single-hull VLCC sold for conversion, according to Gibsons, was the 284,497-dwt Front Lady, which today works as the offshore unit Petrobras 77.
MUMBAI: The Indian rupee today snapped its two-session uptrend against the American currency, falling 18 paise to close at 62.34 on fresh dollar demand from banks and importers.
The dollar was trading up in global markets on caution ahead of the US Federal Reserve's January policy meeting minutes release.
The rupee resumed lower at 62.20 per dollar as against on Monday's level of 62.16 per dollar at the Interbank Foreign Exchange (Forex) Market. It dropped further to 62.35 before ending at 62.34, a loss of 18 paise or 0.29 per cent.
The rupee had gained 15 paise or 0.24 per cent in the previous two sessions.
The rupee hovered in a range of 62.19 per dollar and 62.35 per dollar during the day.
"We believe with the overnight risk of Fed meet minutes release due tonight, investors will not want to be on the wrong side of the market when it reopens on Friday. So, volumes remained low on Wednesday ahead tonight FOMC minutes and tomorrow's holiday. Indian currency derivative markets are closed tomorrow for a local holiday," said Admisi Forex India Pvt Ltd, Director, Suresh Nair.
The dollar index was up by 0.09 per cent against a basket of its major global rivals.
Asian equities ended higher today as pessimism over the Greek debt situation receded to some extent.
In the New York market, the US dollar were modestly higher against its major rivals in early trade.
Meanwhile, the Indian benchmark Sensex ended higher by 184.38 points, or 0.63 per cent, to close at 29,320.26.
Pre Lunar Holiday iron ore recovery and steady scrap prices raise sentiments among India's secondary sector market players temporarily
Indian secondary steel market has been struggling to revive during the week which has been belied experts. Even the rally has not been steep it certainly has raised eyebrows coming at a time when the fundamentals remain unchanged.
On talking to experts Steel Guru come to know that the recent rally in international iron ore levels and resistance in scrap levels have created temporary optimism. However it is unlikely to sustain given the demand and liquidity crunch plaguing the market.
The price rally was across all products except structural steel declining at Ludhiana and Delhi but rally handsomely by INR 800 per tonne at Mumbai.