16 July 2017

Falling Capesize Rates Could Trigger More Scrapping Activity

The market for ships scrapping has been rather slow over the course of the past few weeks for a number of reasons, chief of which the shipowners’ reluctance to part with some of their older ships, but also because of the confusion reigning the demolition market at the moment. However, things could well be starting to pick up, as the continuous fall of the Capesize market, could trigger more sales.

In its latest weekly note, the world’s leading cash buyer of ships, GMS said that “renewed sense of purpose and aggression to conclude units seemed to inject itself into the market this week – particularly in Bangladesh – where we finally have confirmation that the prohibitive taxes announced in the recent budget will be reversed for the next two years (at the very least). Influential members of the Bangladesh Ship Breakers Association (BSBA) had reportedly lobbied the finance ministry since the initial announcement was made, whereby a 15% increase in VAT was to be levied on all incoming ships. This week, the BSBA appear to have finally succeeded in getting these duties overturned. Subsequently, Cash Buyers witnessed an increase in demand and enquiries emerging from Bangladesh as prices shot up by least USD 20/LDT from the inert and hesitant levels of last week”.

GMS added that “as a result, a number of deals were reportedly concluded to local buyers this week and some of those units (particularly the larger LDT vessels) that were likely destined for Indian / Pakistani shores will probably be redirected towards Chittagong in order take advantage of the renewed / hotter pricing on offer there. At odds with the demand has been the constant rains across most of Bangladesh and have left the industry in a paralytic state for a better part of the last two weeks. As such, most of the recently delivered vessels are simply being stockpiled at local yards making it difficult to gauge where local steel prices will level off once the cutting / reselling of ships steel resumes. For now, it is expected that demand and pricing should remain firm going into the remainder of July and it is likely that a number of high priced deals (market units or any remaining tonnage in various cash buyer hands) would be concluded at increasingly firm numbers”, it concluded.

In a separate note, Clarkson Platou Hellas said that “the increase in activity that was expected after the Eid festivities has not materialised as of yet and in hindsight this has not been a bad thing since local sentiment is still weak particularly as another rumour surrounding the Bangladeshi budget indicating that the 15% VAT on the importing of vessels for recycling may actually go through, There has only been a trickle of supply so far except for the occasional larger LDT sized tanker, to keep the market from grinding to a complete halt at present. However with falling Capesize freight rates, we could start to see vessels emerging from this sector which has lain dormant compared to last year where 67 had already been sold for recycling compared to the mere 19 so far this year. Although looking across to Europe there have been further rises in the Turkish recycling market after USD has been weakening against the Turkish Lira and as well as strong demand from local steel mills, this could continue with the supply of tonnage from geographically positioned vessels in the Mediterranean continuing to be sparse and not meeting demand locally that is needed”.

Meanwhile, Allied Shipbroking reiterated that “some slight improvement in terms of activity was being noted this past week, with the number of demo candidates being circulated showing signs of new life. This may well end up being the markets undoing, with the increased availability likely to allow for a softening in prices being quoted by cash buyers. The market seems to now be mainly moving by Indian and Pakistani breakers, with Bangladeshi buyers being taken out of the current competition by the ongoing dispute with regards to the proposed tax hikes. In terms of local steel prices, we are seeing a fairly stable market for the time being, however this has not convinced for any speculative buying to take place over the past two weeks, showing the jitters being felt by most buyers given that we are now firmly in the monsoon season and appetite amongst breakers is relatively subdued”, it concluded.

Source: hellenic shipping news. 13 July 2017

Marine services companies in Sydney Harbour are busy, growing, but not shipbreaking:

Officials with McKeil Marine and Heddle Marine Services say Sydney Harbour is ideally located to take advantage of the growing need for tugboats, barges and ship repairs in the Atlantic region.

Mike Moore Heddle Marine
Mike Moore, regional manager of commercial interests for Heddle Marine Service's East Division in Sydney, stands on the deck of a barge that is being repurposed at the company's wharf in Sydport Industrial Park. The barge was used to service the oil and gas industry off Newfoundland, and will soon be used to service a mining company after the steel and lumber are taken off the deck, to be replaced with another configuration the client has requested. (TOM AYERS / Local Xpress)

SYDNEY — The wharf in Sydport Industrial Park is busy and getting busier, with repairs, maintenance and recycling of tug boats, barges and ships.

One activity that is not happening — and can't happen due to the lack of infrastructure — is shipbreaking, officials with McKeil Marine and Heddle Marine Services told Local Xpress on Friday during a tour of the wharf and the vessels tied up alongside.

"We are in marine services," said Mike Moore, regional manager of commercial interests for Heddle Marine's East Division. "We don't do shipbreaking.

"We're not involved in any way with scrapping a vessel. What falls within our wheelhouse is ship repair and ship maintenance."

McKeil, a related but separate company, operates tugboats and barges, said company spokesman Jamie Connors. It began leasing the Sydport wharf and property from Cape Breton Regional Municipality in 2015 and has an option to buy it. Heddle followed shortly after that.

The wharf is silhouetted with a couple of cranes and is littered with lumber, aluminum, steel, a large generator that Moore said could power the community of New Waterford, and wires and cables.

It's also the home of the MV Princess of Acadia, the former Digby ferry that is waiting to be scrapped.

Other working ships are at the wharf for repairs, and the Arca 1, a former fuel supply barge from Montreal that ran aground in the Atlantic Ocean off Cape Breton in January, remains tied up at the dock six months later.

A spokesman for Transport Canada said in an email this week the Arca 1 can't leave port until the federal agency is satisfied.

"The vessel remains under detention while Transport Canada awaits information from the owner indicating that the required corrective actions have been completed and its propulsion equipment is operable, or other arrangements have been made to safely move the vessel," Pierre Manoni wrote.

Several barges used in the oil and gas industry off Newfoundland are also alongside the dock and are in various states of recycling, which Moore was quick to point out is not the same thing as shipbreaking.

Instead, the deck structures — including shipping containers, or "sea cans" as they are called in the business — are removed and the barges are then cleaned up and new structures are added, depending on the needs of the client, said Moore.

For example, one of the barges was used to move equipment in the oil and gas industry, and the deck is being reconfigured to move different equipment for a mining company.

All kinds of equipment and materials are also removed from the vessels and are inspected and reused or recycled. Heddle Marine resells sea cans, fire extinguishers, scrap metal and other materials removed from the barges.

"We don't scrap it and throw it away," said Moore. "We reuse it."

Some of the materials are used to manufacture ladders and gangways that connect the barges to each other or to the dock, or other custom equipment the clients demand, he said.

Some of the lumber is reused in new deck structures, and some will be donated to local organizations such as the all-terrain vehicle club or the groups that maintain the Baille Ard and Coxheath Hills trails.

Hazardous materials are also removed and disposed of at the proper facilities, Moore said.

A spokesman for Marine Recycling Corp., the company that won a federal tender to scrap the former Digby ferry at a cost of $2.6 million, told Local Xpress this week that shipbreaking in Sydney Harbour was a possibility, but that no decision had been made yet.

Moore said Sydney Harbour simply doesn't have the facilities or infrastructure required to cut up and scrap a large ship. But it can be decommissioned and prepared for towing to another facility with shipbreaking capabilities, such as the Marine Recycling location in Ontario.

The MV Miner, a Great Lakes barge that ran aground off Scatarie Island in 2011, was scrapped where it landed and was budgeted to cost $12 million, but reportedly cost around $18 million, including the cost of containing the work site, removing hazardous materials and restoring the environment after the ship was cut apart and the metal was hauled away.

The Arca 1, a flat-bottomed fuel barge powered by twin outboard motors that many observers say should never have been allowed to head out into the open ocean, is still being detained in port by Transport Canada. Moore said Heddle Marine was contracted by the owners and their insurance company to prepare the vessel for moving, which is expected to occur soon.

The masts and other tall parts of the deck structure have been carefully cut down and secured, and the hull has been outfitted so that a specially designed ship can attach straps and lift the Arca 1 on board for transportation to Mexico, where the owners plan to reattach the deck structures and put the fuel barge to use, he said.

Heddle has 25 employees ranging in age from 22 to 67, he said, and most are Cape Bretoners who had been working out of province but wanted to come home.

John Sullivan, the company's occupational health and safety officer, said morale among the workers is very high.

"I worked away from home for 14 years and didn't realize how much I lost with family," he told Local Xpress. "Now, I'm home. With the opportunity this company has given me, I'm proud to be home."

Eight of the company's workers are Indigenous, and under a deal with Nova Scotia Community College and the Mi'kmaw Economic Benefits Office, trainees are given an opportunity to learn skills and gain practical experience, said Moore.

"The only way we're going to grow is to invest in people," he said.

A Whitney Pier native who has worked in the financial services industry and in economic development, Moore has heard recent questions and comments about the possibility of shipbreaking in Sydport, and said he was happy to dispel that notion.

"We want to be open and honest and transparent here," Moore said. "We're building work here for our employees. We're actually trying to do something good for Cape Breton."

Both McKeil and Heddle buy a lot of supplies from local companies and employ Cape Bretoners as much as possible, he said.

And while the oil and gas sector in the Atlantic region is winding down, he said, there are plenty of other opportunities for marine services locally, including the cruise ship industry, Marine Atlantic, the Canadian Coast Guard and the Donkin mine.

Port facilities in Halifax, Saint John, N.B. and St. John's, N.L., are all busy and there's room in the market for services based in Sydney, which is also ideally located to pick up some of the slack, said Moore.

"There's a lot of ships that go past Cape Breton," he said. "Vessels are always going to encounter emergency situations. Like your car, they'll have breakdowns or need service. I really do believe we're going to continue to grow by leaps and bounds."

Source: local xpress. 15 July 2017

Turkey Proactive on Ship Recycling Convention:

Progress towards the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships (2009) has been slow. However, Turkey, one of the world's leading ship recyclers, has again shown its willingness to meet the requirements of the Convention with another yard achieving a statement of compliance.

ClassNK issued the statement to a ship recycling facility in Izmir, Turkey, Isiksan Ship Recycling and Trading this week. Lloyd's Register has already issued six such statements to other yards.

There are only 22 yards in Turkey, and the Turkish Administration has been proactive, having already taken its ratification of the Convention through its Parliament. The Turkish Ambassador is expected to deposit the instrument of ratification at IMO soon. Furthermore, the Turkish Ministry of Transport, Maritime Affairs and Communication has played an active role in the drafting of the Convention.

Although the Hong Kong Convention has yet to enter into force, Isiksan has carried out substantial improvements to its facility in a bid toward safer and greener ship recycling as well as developed the Ship Recycling Facility Plan required for a competent authority’s certification according to the Convention.

The Hong Kong Convention intends to address all the issues around ship recycling, including the fact that ships sold for scrapping may contain environmentally hazardous substances such as asbestos, heavy metals, hydrocarbons, ozone-depleting substances and others. It also addresses concerns raised about the working and environmental conditions at many of the world's ship recycling locations.

The text of the Hong Kong Convention was developed over three and a half years, with input from IMO Member States and relevant non-governmental organizations, and in co-operation with the International Labour Organization and the Parties to the Basel Convention.

Regulations in the new Convention cover: the design, construction, operation and preparation of ships so as to facilitate safe and environmentally sound recycling without compromising the safety and operational efficiency of ships; the operation of ship recycling facilities in a safe and environmentally sound manner; and the establishment of an appropriate enforcement mechanism for ship recycling, incorporating certification and reporting requirements.

Upon entry into force of the Hong Kong Convention, ships to be sent for recycling will be required to carry an inventory of hazardous materials, which will be specific to each ship. An appendix to the Convention provides a list of hazardous materials the installation or use of which is prohibited or restricted in shipyards, ship repair yards, and ships of Parties to the Convention. Ships will be required to have an initial survey to verify the inventory of hazardous materials, additional surveys during the life of the ship and a final survey prior to recycling.

The Convention will enter into force 24 months after the date on which the following conditions are met:

* Ratification by 15 states,
*  Representation by 40 percent of world merchant shipping (by gross tonnage), and
* A combined maximum annual ship recycling volume not less than three percent of the combined tonnage of the ratifying states.

So far, Belgium, Congo, France, Panama Denmark and Norway have ratified the Convention. Some believe the Convention’s entry into force could be nearly 10 years away, after many of the world’s most asbestos-laden ships have already been recycled. Others more optimistically expect its entry into force in five years.

Source: maritime-executive. 12 July 2017

Louis Kahn-designed floating concert hall in danger of demolition:

Without a buyer, the architect’s singular steel ship soon headed for scrapyard

One of the weirder projects in architect Louis Kahn’s body of work may be facing an untimely end. The unique Point Counterpoint II, a 195-foot-long floating concert hall commissioned by the American Wind Symphony Orchestra, may dock for the last time in its present form. Without a new buyer, the concert hall may soon be torn off and turned into scrap at the end of the month, with the underlying barge turned into a simple vessel to move goods.

The boat is an extreme outlier in the Kahn oeuvre, one dominated by powerful, towering modernist architecture such as the Salk Institute. The stainless steel barge first set sail during 1976. Conductor Robert Austin Boudreau asked his friend Kahn to design the unique floating music hall in the ‘60s. The project was finished after the architect’s passing in 1974, just as the country’s birthday celebration reached a fevered pitch, and served as a bold, whimsical way to celebrate the Bicentennial. Ever since, it’s helped the group “make cultural waves on the waterfront,” serving as a mobile venue.

The centerpiece of the double-hulled, self-propelled river showboat is the hydraulically-operated 25-foot-tall stage that opens up like a clam shell when the boat is docked and ready for a performance, and lowers after concerts so the vessel can slip under bridges.

Since debuting in Biloxi, Mississippi, in 1976, the odd-looking ship has logged serious miles on rivers, lakes, and oceans, docking and hosting performances in numerous waterfront locations across the Unites States, as well as along Northern European Rivers and the Caribbean, Baltic, and Irish seas. In 1989, it even sailed to Russia and performed near Saint Petersburg.

It’s not a fast boat by any means, with a top speed of 6-8 knots depending on the current. But it’s a big advance on the symphony’s previous vessel. The first Point Counterpoint, which Boudreau purchased for $4,000, was a sunken vessel dredged up from the bottom of a river in Pittsburgh.

According to a recent letter in the New York Review of Books written by cellist Yo-Yo Ma, after five decades, Boudreau has decided he can’t pay for upkeep anymore. Unless a buyer appears by the end of July, the boat will be broken down for scrap in a Louisiana shipyard. Ma calls the ship, “a powerful, living testament to American creativity and to the elemental role that culture plays in human life.”

The ship is currently tied up in Ottawa, Illinois, where Boudreau and others have sought potential buyers. In 2015, the conductor suggested making the ship a part of the first Chicago Architecture Biennial, having it appear on the Riverwalk for a concert, and even discussed the potential of selling it to the City of Chicago.

Source: curbed. 14 July 2017

12 July 2017

Platform publishes South Asia Quarterly Update #13

Brussels, 12 July 2017 - There were a total of 210 ships broken in the second quarter of 2017. 158 of these ships ended up on South Asian beaches for dirty and dangerous breaking [1]. The Platform was able to document five accidents at the shipbreaking yards in Chittagong, Bangladesh, between April and June, which led to the death of four workers and the injury of two. 

Ishaq worked as a winch operator and died struck by a cable at the BBC Steel Shipbreaking/KR yard. This is the second fatal accident this year at BBC Steel. Zishan died in an accident at the Ratanpur Steel Re-Rolling mills where iron plates from the ships are transformed for the construction industry. In Jamuna Shipbreaking yard, the Platform reported in May about the death of Shahinoor who fell from the Hanjin Rome, the first ship arrested after the bankruptcy of the Korean container giant Hanjin Shipping. This ship was sold on auction by the Singaporean courts following the bankruptcy of Hanjin Shipping and should be a harrowing wake-up call to courts and bankruptcy administrators that there are human consequences of selling ships for the highest return price to the beaches. During a nightshift on 21 May, Shochindro Das died when he was hit by an iron pipe. He was working as a cutter helper in the Khawja yard, which shares owner with Kabir Steel. Working during night shifts without protective equipment are particularly graving circumstances that sadly witness of the extremely harsh conditions workers face at the shipbreaking yards in Chittagong. Local sources are claiming that Shochindro Das was only 15 years old, whilst the officially reported age was 26. The Platform will investigate these serious allegations. Child labour at the Bangladesh shipbreaking yards is illegal under Bangladesh law and also under the ILO’s Convention on Worst Forms of Child Labour.

The worst dumping country this quarter was Germany with 16 beached ships, a consequence of the multiple bankruptcies due to the toxic financing that has been characteristic of the German shipping industry. In June, German public television channel ARD documented the appalling conditions under which German ships are broken in Bangladesh. The other leading dumping nations were Singapore with 12 ships, Greece with 9, and South Korea with 8. Though 45 out of the 158 beached vessels this quarter were European-controlled, only four of these had a European flag.

Legislation at the international and European level to regulate the disposal of ships is based on flag state jurisdiction. The flags of the worst dumping countries were however rarely or not used at end-of-life. Flags of convenience, in particular the grey- and black-listed ones under the Paris MOU, are used by cash buyers and ship owners to send ships to the worst breaking locations. Nearly a third (49) of all the ships sent to South Asia this quarter changed flag to typical end-of-life registries only weeks before hitting the beaches: St Kitts & Nevis, Comoros, Palau, Djibouti, Niue and Togo. These flags are not typically used during the operational life of ships and offer ‘last voyage registration’ discounts. They are grey and black-listed due to their poor implementation of international maritime law.

There were five cases where the ships in question were sent to South Asia in breach of the EU Waste Shipment Regulation [2]. In Bangladesh, the Platform was successful in taking legal action to halt the breaking of the FPSO North Sea Producer which was illegally exported from the UK in 2016. The Platform also alerted this quarter the Brazilian government of several vessels exported to the beaching yards from Brazil in clear breach of UNEP’s Basel Convention.

The worst company was the Singaporean Continental Shipping Line that had six Liberian-flagged vessels that all changed flag to St Kitts & Nevis or Comoros and were beached in South Asia. Quantum Pacific is a close runner-up on second place for worst dumping practices, with four ships sold to Pakistan and Bangladesh. Quantum, owned by Idan Ofer, son of the late shipping mogul Sammy Ofer, has been under the Platform’s radar before as the worst dumper of 2015. The worst dumper of 2016 was UK-based Zodiac Maritime, run by Idan’s brother, Eyal Ofer.

The figures of this quarter not only show how legislation based on flag state jurisdiction will fail in changing the deplorable shipbreaking practices of the shipping industry, they also show that companies such as Quantum and Zodiac have no shame in continuing to exploit vulnerable workers in South Asia for the sake of extra profits.  


[1] During the second quarter 2017, the following number of vessels were broken in other locations: 26 in Turkey, 22 in China, and 4 in the rest of the world.

[2] German Gebab Konzeptions- und Treuhandgesellschaft mbH & Company KG owned GURU; Chilean Naviera Ultranav Limitada owned HAPPY FELLOW; US based Diamond Offshore Drilling Incorporated owned SPUR; Romanian S.C. Grup Servicii Petroliere S.A. owned FALCON; and Italian Argo S.r.l. owned ALICA.

Director and Founder
NGO Shipbreaking Platform
Tel.: +32 (0)26094419

Source: NGO Shipbreaking Platform