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SHIP BREAKING - Will This Industry Sink?

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by - 11/24/2015 4524 Views

Srapping Metal Economically

Ship breaking or ship demolition is a process involving the breaking up of ships for either a source of parts, which can be sold for re-use, or for the extraction of raw materials, chiefly metal scrap. It may also be known as ship dismantling, ship cracking, ship recycling, or ship disposal. Modern ships have a lifespan of 25–30 years before corrosion. Encountered by metal fatigue and a lack of parts render it uneconomical to run. Ship breaking allows the materials from the ship, especially steel, to be recycled and made into new products. This lowers the demand for mined iron ore and reduces energy use in the steel-making process. Equipment on board the vessel can also be reused. While ship breaking is, in theory, sustainable, there are concerns about the use of poorer countries without stringent environmental legislation. It is also considered one of the world's most dangerous industries and very labour-intensive.

In 2012, roughly 1,250 ocean ships were broken down, and their average age is 26 years. In 2013, Asia made up 92% of the tonnage of vessels demolished, out of a world total of 29,052,000 tonnes. India, Bangladesh, China and Pakistan have the highest market share and are global centres of ship breaking, with Alang being called as the largest “GRAVEYARD OF SHIPS”. The largest sources of ships are states of China, Greece and Germany respectively, although there is a greater variation in the source of carriers versus their disposal. The ship breaking yards of the Indian subcontinent employ 100,000 workers as well as providing a large amount of indirect jobs. Water-craft produce 10% of India's steel needs.

Benefits from Ship breaking:

Shipbreaking plays an important role in the national economy for a number of reasons:

1. Production of steel:

The scrapping of ships paves the way as one of the main source of steel scrap and in doing so saves substantial amount of money in foreign exchange by reducing the need to import steel materials.

More than 350 re-rolling mills have been using ship metal scrap as their raw materials. The industry is currently supplying more than 60 per cent of the raw materials for local steel industry. Besides, local shipbuilding industry also largely depends on this as raw materials mostly are being used from scrap steel.

A good number of local industries including heavy and light engineering already been developed depending on ship breaking industry

2. In some ways it can be considered a “green industry”. Almost everything on the ship and the ship itself is recycled, reused and resold. The scrapping of ships supplies raw materials to steel mills, steel plate re-manufacturing, asbestos re-manufacturing as well as providing furniture, paint, electrical equipment and lubricants, oil to the number of businesses that have sprouted up as a result.

3. It generates large amounts of revenue for the Government through the payment of taxes. Every year the Government collects revenue from the shipbreaking industry through import duty, yards tax and other taxes.

4. Employment. Despite the conditions that the workers are employed under, this is an industry that employs more than 50,000 people directly while another 0.1 million people are involved indirectly. It provides employment for some of the poorest people from the north of Bangladesh who would otherwise have no employment.

These economic benefits have made shipbreaking a powerful industry. But these economic benefits should be considered together with the social and environmental costs. Together, with better regulation shipbreaking can also bring social and environmental benefits.

The material processed from ship breaking scrap is better in terms of strength, impact strength and through thickness ductility. In terms of chemical composition it is consistent and has low sulphur and phosphorus content. In terms of metallurgical properties, steel from ships are normalized, fully killed and has finer and more compact grain structure, free from inclusions, pores and cracks and austenitic properties. Hence for all kinds of applications those require impact resistance, corrosion resistance, machinability, bendability, and formability, steel from ship breaking scrap has been found to be more suitable than steel from ingots and billets. Incidentally, everywhere else in the world the scrap from the demolished ships are usually sent into melting furnaces, India is probably only country that has the technique of re-rolling scrap into producing construction steel without having to first cast scrap as billets and ingots.

The Current Trend:

Modern steel-hulled ships are built to last for several decades at sea before repair becomes uneconomical. After their useful life is over, more than 90 percent of the world's ocean-going container ships end up on the shores of India, Pakistan, Indonesia, or Bangladesh, where labor is cheap, demand for steel is high, and environmental regulations are lax. The ships are driven right up onto shoreline lots set aside for ship breaking, then attacked by hammer and blow torch until all usable material has been stripped away to be sold or recycled. The work is extremely difficult, and low-paid workers face significant risks from the dangerous conditions and exposure to materials like asbestos and heavy metals.

In the world's biggest ship recycling centre of Alang on India's Arabian Sea coast, workers with blow torches cut segments of steel stripped from the rusting hull of a towering cargo ship, sold for metal scrap by its Japanese owner.

But in this town of Gujarat, more than half of the ship-breaking yards have shut in the past two years and the future of the trade in India and neighbours Bangladesh and Pakistan is bleak.

The industry has been hit by a flood of cheap Chinese steel and new European Union environmental rules due later this year threaten to push business to more modern yards in places like China and Turkey - in turn devastating local economies.

"People are running this business from their heart, not from their mind," said Chintan Kalthia, whose company R.L. Kalthia Ship Breaking Pvt Ltd runs one of Alang's most modern yards.

Still, he takes pride in the fact that after months of negotiations with a Japanese owner, his yard secured the biggest ship currently being recycled in Alang.

"But this is my last ship. This business is dying," he added, suddenly sounding weary, as workers outside his beach-side glass office sized slabs of steel peeled from the ship.      

Ships sold to South Asian breakers, which control about 70 percent of the market, are winched at high tide onto a beach, where they are taken apart by mostly migrant labourers.

Equipment, such as radars, engines - and even tables and chairs - is taken off and sold, while the steel from the hull is removed for scrap.

The trade in Alang used to employ about 60,000 directly, with thousands more in spin-off businesses, said yard owners.

But roads on the 11 km (7 mile) beach front that locals say used to buzz with people and trucks now appear deserted and dozens of shops displaying everything from crockery to computers ripped out of ships are struggling to get supplies.

"I used to make five, six, seven trips a day," said Munna, sitting atop his tractor with extra wheels able to carry heavy scrap from the yards. "Now I hardly get one or two calls."

THE CHINA FACTOR:

With a plunge in steel prices, ship owners are getting about $3.6 million less for the 25,000 tonnes of recoverable metal from a typical iron ore or coal carrying ship than just eight months ago.

The finger of blame is being pointed at China.

"China is selling below the price of recycled steel," said Amit B. Padia, owner of Sagar Laxmi Ship Breakers, as an orange crane lifted a bathroom removed from a ship onto a trailer.

With China's economy slowing, its steel exports soared 51 percent to a record 93.78 million tonnes last year and are up nearly 30 percent in the first five months of 2015.

The impact has been felt in Alang where the number of active yards fell to 50 this year from more than 100 in 2014, according to the Ship Recycling Industries Association India.

The number of vessels beached also dropped to a six-year low of 275 last year and was only 54 in the last three months, it said.

"WORST IN 30 YEARS"

The situation in Pakistan appears equally bad.

"It has always been a cyclical business but people who have been in this industry tell me this is the worst in 30 years," said Shoaib Sultan, the owner of Horizon Ship Recycling in Karachi.

The story in Bangladesh is similar.

"Three years ago there were about 80 yards, now it's down to 25. I think another 10-15 yards will go," said Zahirul Islam, director of PHP Shipbreaking and Recycling Industries Ltd in Chittagong.

Ship breakers globally bought 25.2 million deadweight tonnes (dwt) of vessels up to early July, against 33.8 million dwt all of last year, with Bangladesh the largest buyer, according to shipping services firm Clarkson.

"Everyone thought prices will improve and bought a lot, but now they are sitting on huge inventories," says Islam.

It takes up to nine months for a typical bulk carrier in India to be broken up and its steel processed, said Rakesh Khetan, chief executive of Singapore-based Wirana Shipping Corp, a major buyer of ships for scrap.

Category : Metal

Tags : Ship Breaking, Scrap Metal from Ship Breaking, Ship Breaking Metal Scrap, Ship Recycling Metal Scrap, Ship Breaking Trend


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About Georgy Abraham

As the bright morning of 28th May dawned in the year 1972, in the fulfillment of time according to the plan & will of Almighty Godbrought me forth into this world and I was brought up & educated in Orissa. My parents provided me with the best of education in an English medium school with high standa .... more info

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