LOSS-MAKING Hapag-Lloyd has decided to add costs by no longer selling vessels to shipbreakers that do not comply with strict United Nations regulations - even though the regulations are not in force.
The German carrier said it would only use scrap yards that have the
International Organisation for Standardisation 14001 certification, and thereby
taking work away from those who do the shipbreaking on the Indian subcontinent.
Hapag-Lloyd, which has a reputation for ahead-of-schedule compliance, now
insists shipbreakers follow the UN's International Maritime Organisation's Hong
Kong Convention for the Safe and Environmentally Sound Recycling of Ships.
So far only Norway, France and Congo have ratified the convention.
Not all recycling yards can afford these standards, notes Lloyd's List, adding
that such a policy will limit Hapag-Lloyd's ability to benefit from the higher
prices offered by breakers in India, Pakistan and Bangladesh.
But the report also noted that the Jiang Xiagang Changjiang Shiprecycling Yard
near Ningbo does meet specifications at prices that are a third less than those
located in the Indian subcontinent.
According to buyer GMS, Pakistan, Bangladesh and Indian yards are offering
between US$445-$455 per ldt (light displacement ton) compared with Chinese
yards which are offering $290 per ldt.
Pakistan and Bangladesh have continued to dominate demolition activity over the
past week, but there are fears that deflated sentiment in India could drag
rates down across the board.
Brokers said Indian buyers were struggling to maintain rates under pressure
from a fluctuating currency and from cheap imports of Chinese steel making ship
plate less competitive.
"It may well be some time before we see Indian buyers offering with the
vigour and bullishness of the last quarter, with many predicting some further
lows to come on the currency in the weeks ahead before any improvements are
seen," said US-based cash buyer GMS.
Despite the gloomy outlook on the shipbreaking beach in Alang, an Indian buyer
still managed to seal the top deal of recent days. There is ample demand and
after months on sidelines, Indian buyers took the lion's share of the tonnage
Source : HKSG.