New Wave of COVID Cases Hampers South Asia's Shipbreakers

ngo shipbreaking
Oxygen is an essential supply for the ship demolition process (file image courtesy NGO Shipbreaking Platform)

Published May 7, 2021 2:25 PM by Ankur Kundu

India has experienced severe shortages of purified oxygen due to its ongoing second wave of COVID infections, and this has drastically curtailed the country's ship recycling activity. The outbreak has caused more than 218,000 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.

However, with neighboring Bangladesh and Pakistan recording a sharp rise in fresh coronavirus cases, ship recycling capacities in these nations’ yards have also been significantly hampered. 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 Alang, Chittagong and Gadani, according to leading cash buyer GMS.

Turkey, another key name in the ship recycling scene, is also under lockdown until May 17 in the face of rising COVID infections.

Nonetheless, GMS reports that recycling prices are bearing up, led by Bangladeshi shipbrokers. They are paying up to $500 per light displacement ton 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.