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

11 July 2017

The ups and downs of container vessel scrapping as charter rates rise and fall:

Alphaliner recently downgraded its projection for containership demolitions this year after an improvement in charter hire rates coincided with a dip in steel scrap prices.

The combination encouraged some shipowners to defer some vessel recycling, it said. Hitherto scrapping was on track to pass last year’s all-time record of 650,000 teu.

However the situation may change yet again.

So far this year, Alphaliner has recorded 92 containerships, for a capacity of 280,260 teu, sold for scrap.

However, it expects a pickup in scrapping in the coming months, as evidence increasingly suggests that the recent recovery in the charter market as “already reversing” after a surge in the second quarter associated with the transition requirements of the new alliances.

Indeed, Alphaliner reported that charter rates had “nosedived” for tonnage over 5,500 teu, and that the rest of the market was “following an uninspiring course” as a consequence of “uneven demand across most vessel types and sizes”.

According to its data, currently there are 37 panamax vessels of 4,000-5,000 teu unemployed, 25 anchored in cold lay-up, either awaiting a sustained improvement in charter rates or for scrap prices to become more attractive.

Daily hire rates for panamax vessels touched a sub-economic rock bottom of mid-$4,000 at the end of 2016, but had recovered to around $10,000 per day by April , before softening recently to about $8,500 as alliance-driven demand evaporated.

This still potentially enables shipowners that acquired panamax vessels at distressed prices to produce a return; but for the owners that paid top dollar, $8,500 a day is unlikely to cover operating costs, resulting in these vessels likely to become demolition candidates.

Alphaliner also noted that scrapping could receive a further boost from the IMO’s Ballast Water Management Convention on 8 September. Ships will be required to “manage their ballast water to remove, render harmless, or avoid the uptake or discharge of aquatic organisms and pathogens within ballast water”.

Owners of older vessels will need to pay for an expensive retrofit, installing ballast water treatment systems (BWTS) in order to pass classification surveys.

Technical advances are said to be supporting lower prices, but reports of BWTS estimates seen by The Loadstar have ranged from $500,000 to $3m, depending on ship size.

In its recent casualty review, insurer and risk consultant Allianz Global Corporate & Speciality expressed concern that the new ballast rules “could have a significant impact” on already financially stressed shipowners.

Indeed, in the absence of a new surge in demand and a resulting sustained hike in daily hire rates, the cost of installing a ballast water system could be the tipping point for containership owners to “wave the white flag” and consign their vessels to the scrapyard.

Source: the load star. 15 June 2017

Brownsville ship recycling yard has new owners and new name

Aerial view of 70 acre SteelCoast facility

MAY 2, 2017 – The Brownsville, Texas, ship recycling and scrap processing facility formerly known as ESCO Marine is reopening under new ownership.

Hilco Redevelopment Partners, a unit of Hilco Global (Hilco), and MCM Marine Services, an affiliate of MCM Management Corp. (MCM), acquired the assets in U.S. Bankruptcy Court proceedings, presided over by Judge David R. Jones, following chapter 11 bankruptcy proceeding filed in late 2015.

Hilco and MCM have formed a joint venture company under the name SteelCoast (www.steelcoastus.com) with a new management and operations team to begin running the business immediately.

SteelCoast will immediately commence the work of dismantling the decommissioned aircraft carrier USS Saratoga and former MARAD vessels Shenandoah and Yellowstone.

Hilco Redevelopment Partners EVP and SteelCoast Board Member, Roberto Perez said, "Putting a deal together to acquire and relaunch this unique ship recycling and scrap processing business was complex, especially given the nature of the assets and our goal of maintaining key U.S. Government client relationships. Following a lengthy diligence process, we are confident that SteelCoast has a very substantial growth path."

Rob Mardigian, CEO of MCM and SteelCoast Board Member, said, "Hilco and MCM have become very proficient at identifying new opportunities for industrial facilities that many have viewed as too challenging to tackle."

SteelCoast will be one of the largest and most technologically advanced reclamation, remediation and recycling operations in North]America. The Brownsville, Texas facility, which has already undergone over one million dollars in renovations and improvements, will provide a complete end to end solution including recycling of large oceangoing vessels (both military and non-military) from around the world. SteelCoast will also dismantle decommissioned, idled or underutilized oil rigs, train locomotives, railcars, as well as other industrial and commercial sources of recyclable metals.

Additionally, SteelCoast will process automobiles and other light metal products in its 4500 HP shredder. These types of reclamation and recycling projects allow for the scrap processing of both ferrous and non-ferrous metals during the dismantling process.

SteelCoast will then work to process and resell the scrap to be used in various other manufacturing industries.

Hilco and MCM have installed Mr. Kris Wood as CEO at SteelCoast and is in the process of adding an experienced operations and management team.

Working with Mr. Wood over a number of months, SteelCoast has developed a detailed business plan which includes an investment in sales support to build upon its client base, which includes contracts with the U.S. Navy and marketing and reselling of the recycled materials. SteelCoast also has immediate plans to invest millions of dollars more into the infrastructure, berths, technology and equipment to ensure the facility is a leading state of the art, world class ship recycling and scrap processing facility.

Mr. Wood has considerable experience within the ship recycling and scrap processing industry. A lifelong South Texas resident, he worked at the former company for over 12 years, adding new management responsibilities throughout his career.

Mr. Wood has led several key team projects over the years including oversight of key U.S. Navy and MARAD initiatives.

Mr. Wood said, "I understand that building a hardworking and trusted employee base is vital. I'm excited that SteelCoast will bring back hundreds of jobs to the community which knows this business well."

The company indicated that it would have approximately 130 employees by the end of May 2017, with plans to hire 80 – 90 more in the coming months.

Mr. Eduardo A. Campirano, Port Director & CEO of the Port of Brownsville said, "We couldn't be more pleased that Hilco and MCM will open its recycling facility and get business going again at SteelCoast."

Source: marinelog. 02 May 2017

10 July 2017

UK ‘takes the lead’ in recycling warships

The UK has taken the lead in recycling warships, according to a report by the Disposal Services Authority (DSA) on the recycling of the former warship HMS Endurance.

The recycling process for the ship was won after a competitive tender by LEYAL Ship Recycling of Turkey. The process resulted in 95.04% of the total materials being recycled or reused.

HMS Endurance was a Class 1 icebreaker which served as a Royal Navy ice patrol ship between 1991 and 2008. It ceased operational service in April 2012 and was made available for disposal to the DSA in June 2015.

In July 2015 DSA gave advance notice of the vessel for further use or recycling, nothing that it would require ‘considerable investment’ due damage caused by extensive flooding in 2008.

As part of the tender process, the DSA convened a Ship Recycling Evaluation Committee including representatives from the Maritime Coastal Agency and the DSA to assess the tender responses against set criteria. Prospective purchasers were required to produce a detailed Ship Recycling Plan, demonstrating their understanding of requirements involved in ship dismantling, which included environmental plans, and facilities and dismantling methodology.

After being awarded the contract, LEYAL Ship Recycling was required to provide a monthly breakdown of the outturn of metals and waste during the recycling programme. Audits were conducted by DSA staff which included a physical inspection of the yard in Aliaga, Turkey. Photographic evidence was also provided at ‘key stages’ of the dismantling process.

An Inventory of Hazardous Materials (IHM) was produced at the start of the project to ‘identify hazards’ contained in the vessel which was compared with the final outturn figures reported to the DSA by LEYAL.

An outturn of materials was communicated to the DSA on a monthly bases. The DSA found, in summary of this information, just over 3,700 tonnes of material were sold or recycled, which was 95.04% of the total materials. This included over 3,500 tonnes of ferrous metals.

The displacements and weights in tonnes of the lightship was 4,050 tonnes, with an estimated metal weight of 3,200 tonnes. Of this, just over 193 tonnes were disposed of.

The DSA said ex-HMS Endurance was completely recycled on the 29 August 2016.

Following the completion of the project, the DSA said: “The report will be sent out to senior internal stakeholders and a growing number of other foreign Governments as they view the UK MOD as the lead when it comes to recycling warships.”

The Disposal Services Authority (DSA) is the organisation within the Ministry of Defence (MOD) that has sole authority to dispose of all MOD surplus equipment within the UK and overseas.

According to the DSA, its aim is to sell surplus ships for further use but where this is not possible – for example when ships are no longer seaworthy and only suitable for recycling – its objectives are to ensure that the vessel is recycled in a safe and environmentally sound manner, in compliance with its legal responsibilities as a producer of waste.

Source: letsrecycle.com. 13 June 2017

San Giorgio del Porto and Saipem complete Costa Concordia project

San Giorgio del Porto and Saipem complete Costa Concordia project

San Giorgio del Porto and Saipem has completed a project to dismantle and recycle Costa Cruises’ stricken Costa Concordia, which hit rocks and capsized off the coast of Giglio Island in Italy on 13 January 2012 killing 32 people.

Costa Concordia was initially raised to a vertical position during a 19-hour parbuckling operation on 17 September 2013. The vessel was then left to rest on an artificial seabed in Giglio to allow the Titan-Micoperi team to carry out stabilisation work in October 2013. Refloating operations began on 14 July 2014, and the ship was towed to Genoa, arriving on 27 July.

In one of Europe’s biggest and most important green ship recycling projects to date, up to 350 employees from San Giorgio del Porto, Saipem and 76 other companies (98% of which were Italian) have spent around one million hours (almost three years) recycling the ship.

Around 8,000 tons of material has been dismantled and over 53,000 tons has been recycled – equivalent to 90% of the ship has been recycled.

“The success of these operations represents an additional recognition of the high value of Italian naval engineering, while demonstrating the importance of a ship recycling activity that is respectful of the environment and of the safety of workers, in accordance with the most recent European regulations,” said San Giorgio del Porto in a press release.

Source: cruise and ferry. 10 July 2017

Japanese firm to build $300-M shipbuilding facility in Negros

A JAPANESE company will start constructing a $300-million shipbuilding facility in Hinobaan, Negros Occidental next year in what will become the Southern Negros Industrial Estate (SNIE), Governor Alfredo G. Marañon, Jr. said. An agreement was signed in October last year by Mr. Marañon and executives of Tsuneishi Heavy Industries, which will set up a ship recycling and reuse facility. The governor has already requested the provincial board to approve an ordinance establishing the SNIE on the lots to be expropriated -- covering an estimated 285 hectares -- and the creation of an office to manage and supervise the industrial estate. The Negros Occidental provincial government is expropriating the property of the defunct Insular Lumber Company (ILCO) and several other private lots in Hinobaan. PB Member Salvador G. Escalante, chairperson of the committee on finance and appropriations, said the lease contract of the provincial property by ILCO already expired and the company also failed to settle its taxes. With ILCO no longer existing, Mr. Escalante said the provincial government now owns the property, but expropriation proceedings are still needed to safeguard the investment. The board committee on laws will hold a hearing this week to discuss the proposed creation of the SNIE.

Source: business world. 10 July 2017

SteelCoast acquires ESCO Marine's vessel recycling operations:

A new joint venture (JV) between Hilco Redevelopments Partners and MCM Marine Services (MCM) known as SteelCoast has completed the acquisition of ship recycling and scrap processing company ESCO Marine.

The purchase was completed after the US Bankruptcy Court proceedings and MCM acquired the assets from ESCO Marine’s former ship recycling and scrapping operations, which were sold following a bankruptcy proceeding filed in late 2015.

SteelCoast has become the new owner of ESCO Marine’s 70 acre ship recycling and scrap processing complex in Brownsville, Texas, US, under the deal.

SteelCoast board member Roberto Perez said: “Putting a deal together to acquire and relaunch this unique ship recycling and scrap processing business was complex, especially given the nature of the assets and our goal of maintaining key US Government client relationships. 

“Following a lengthy diligence process, we are confident that SteelCoast has a very substantial growth path.”

"Putting a deal together to acquire and relaunch this unique ship recycling and scrap processing business was complex, especially given the nature of the assets."
SteelCoast is headquartered in Brownsville, Texas, and plans to hire around 130 employees by the end of May, as well as a further 80-90 additional employees in the months following.

The JV firm has already spent over $1m on the redevelopment its Brownsville site, which will provide a complete end-to-end solution, including recycling of huge ocean-going vessels operated by both military and non-military entities worldwide.

The company will also dismantle decommissioned, idled or underutilised oil rigs, locomotives and railcars, in addition to a number of other industrial and commercial sources of recyclable metals.

Furthermore, SteelCoast will process automobiles and other light metal products in its 4500HP shredder and resell the ship scrap to various manufacturing industries.

Source: ship-technology.com. 03 May 2017

09 July 2017

ClassNK and Green Award Strengthen Ties

ClassNK and Green Award announced that they would further broaden their cooperation to ensure safety and minimize negative effects of the shipping industry. ClassNK became a Green Award incentive provider.

ClassNK, a ship classification society, known for its highest quality classification services, covers about 20 percent of the world merchant fleet. The society is committed to safety and the prevention of pollution of the marine environment. As such a representative of ClassNK has been a member of the Board of Experts of Green Award Foundation for a number of years. The Foundation audits and certifies ships and ship managers that demonstrate excellent performance and go beyond industry statutory regulations in terms of safety, quality and environmental protection.

Current issues of concern of the shipping industry are the focus of both organisations: Green Award and ClassNK. Improvement of maritime security, safety of seafarers and reduction of ecological footprint require actions and industry-wide implementation of Corporate Social Responsibility principles. Stakeholders of the maritime industry need to continue to take steps for protection of public health, the ocean and the environment. Green Award actively promotes and supports this idea, while ClassNK, dedicated to the safety and environmental pollution prevention, shares the goal.

Ship recycling is one of the major issues that cannot be omitted and needs urgent attention. ClassNK has been addressing this issue in numerous ways including carrying out inspections on compliance with the Hong Kong Convention (HKC). ClassNK issued the world first HKC statement of compliance for ship recycling facilities in 2012 and the South Asia first statement in 2015. ClassNK’s verification has provided the industry with the transparent and reliable criteria for safe and environmentally sound ship recycling, and has been welcome by shipping companies, ship recyclers, and labor unions. Moreover ClassNK offers a software solution for the development and maintenance of the Inventory of Hazardous Materials (IHM), which is one of the regulatory requirements for ships. The software has been widely used by 3,000 companies in shipping, shipbuilding, and manufacturing sectors. ClassNK has issued the HKC statement of compliance for approximately 1,000 IHMs.

ClassNK, a leader in promoting safer and greener ship recycling hopes to further encourage early implementation on compliance by offering a 10% discount on the issuance of HKC statement of compliance for the IHM to Green Award certificate holders.

Source: marine link. 9 July 2017

Denmark signs UN convention for sustainable ship scrapping:

Eight more nations needed for convention to go into effect

As the seventh nation in the world, Denmark has signed on to the Hong Kong Convention, which aims to better protect the people and environment involved in ship scrapping.

The international maritime organsation, IMO, confirmed that it has received a document in which Denmark expresses its desire to join the convention.

“Obsolete ships typically contain dangerous waste and they must be scrapped under adequate conditions,” said he food and environment minister, Esben Lunde Larsen.

“It’s a good day for those people who work with scrapping ships every time a nation signs the convention, so I’m pleased that Denmark has now finally signed on. Shipping is a global industry where there is a need for mutual international legislation.”

Larsen said that Denmark’s signature sets an example to other nations that it’s important to prioritise the sustainable scrapping of ships.

15 needed
Denmark joining the convention also means that it is a step closer to going into effect as it required the backing of at least 15 nations to do so.

Aside from Denmark, Norway, Congo, France, Belgium, Panama and Turkey have also signed the convention.

About 1,000 trade ships are scrapped around the world annually and most are done so in Asia in poor conditions in nations such as Bangladesh.

Recently, the Danish shipping giant Maersk landed itself in hot water when it was revealed that 14 of its ships were being broken up on open beaches in India, Pakisrtan and Bangladesh.

Source: cph post. 29 June 2017

Greek Shipping’s Head Encouraged by Ship Scrapping Activity and Newbuilding Cancellations:

The year 2016 was another one of multiple challenges for shipping but also a year, at the end of which, Greek shipping emerged stronger both nationally and internationally. Shipping continues to face a weak market with very poor freight rates, due to the continuing oversupply of capacity and the resulting imbalance in supply and demand, as well as the constraints of shrinking ship finance. The first months of 2017 have shown signs of slight recovery supported by firm activity in ship recycling and adaptations (eg. cancellations, extensions) to shipbuilding programmes and by the expected albeit small upward trend in world merchandise trade.

Wider international geopolitical developments were also significant. First and foremost, the decision of the United Kingdom to leave the European Union and a few months later the election of Donald Trump to the Presidency of the USA, both marking the beginning of a new era for Europe and the USA. In the face of these developments, Greek shipowners were able to retain a 20% share of global capacity remaining active in shipbuilding and confirming their resilience but also their inherent ability to make the most out of the high volatility of maritime markets and the business opportunities this creates.

Furthermore, it is important to note that the Greek Prime Minister during his inaugural speech at Posidonia Exhibition in June 2016 paid tribute to the Greek shipping as a business development model and praised the Greek shipowners’ characteristics, those of extroversion, insight and innovation in investment and decision-making. It is a common belief of the State and shipowners that Greek shipping must remain internationally competitive so as to be able to maximize the economic, political and strategic benefits for the country and for Europe, especially in the face of fierce competition from major shipping centres outside Europe.

The year 2017 has been declared «European Maritime Year». However, paradoxically, while the European Union seeks to enhance the competitiveness of its shipping, it acts in a way that undermines the stability of maritime activity in Europe. In this context, the perpetuation of the investigation into the Greek shipping institutional framework, by the services of the Directorate – General for Competition of the European Commission, leaving a shipping community which represents 50% of the European Union fleet in uncertainty, places half of European shipping at risk.

The prospect of relocation to hospitable shipping countries outside Europe, or even within Europe but outside the European Union, is no longer hypothetical. The Greek shipping community and the Greek State share the common goal of maintaining and further strengthening the ties of Greek shipping with its homeland. This requires respect and continuous support for the institutional maritime framework and the revitalization of the maritime know-how and traditions of the Greek nation. The shipowning community is making every effort to strengthen and upgrade maritime education and to increase the Greek seafaring workforce as long as it is understood that the economic terms of employment must be internationally competitive.

Furthermore, the important work carried out by SYNENOSIS, the Greek Shipowners’ Social Welfare Association founded in April 2016 on the initiative of the UGS, makes our sector an exemplar of collective social solidarity. The UGS will continue to be the flag bearer of the SYN-ENOSIS vision, promoting it to the members of the shipping community and to our associates in the broad network of shipping activities. The centenary celebration of the UGS on 9 November 2016, attended by the highest institutions in the country, sent out a strong message in and outside Greece regarding the historical character of Greek shipping as a national asset and regarding its importance for our country.

It is our business but above all our national aim to continue to offer our country the privilege of possessing the world’s leading shipping industry. The historically successful course of our sector demonstrates that we have the potential to achieve this despite today’s complex and unpredictable economic and political environment internationally. Representing an industry of such national and global scope is an honour and a responsibility. The unity of the Greek shipping community through the Union of Greek Shipowners is our collective duty and is no doubt the most effective means of successfully achieving this common goal.

Source: hellenic shipping news. 04 July 2017

Legal status of shipbreaking:

When a ship has reached the end of its life, its owner is faced with the decision of how to dispose of it in a manner that is both commercially viable and environmentally sustainable. The controversial practice of beaching vessels in less-developed countries has prompted initiatives to tighten regulations on the recycling of ships. This update looks at the existing legal framework and future proposals.

The Basel Convention (Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal 1989) is the only internationally recognised legal framework currently in force concerning the recycling of ships. The Basel Convention does not specifically apply to the recycling of ships, but regulates the cross-border transportation of hazardous waste. Since many older ships contain materials and substances which are categorised as hazardous waste, the Basel Convention has a significant impact on the recycling of ships.

In respect of ship recycling, one of the most important rules under the Basel Convention in practical terms is the ban on the export of waste from developed countries to less developed countries. This rule is set out in an addendum to the Basel Convention which is not yet in force, but has already been implemented by a number of signatories. However, it is unclear under the Basel Convention when a ship is considered to be classified as waste.

The lack of clear and comprehensive regulation on the recycling of ships inspired the Hong Kong Convention (Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships 2009), which was the result of nine years of negotiations leading up to a diplomatic conference held in Hong Kong in 2009. Eight years later, the Hong Kong Convention still has not entered into force because of an insufficient number of ratifications. It is uncertain when it will enter into force, but when it does it will represent a significant shift towards stricter regulation on the recycling of ships.

The Hong Kong Convention covers the design, construction, operation and preparation of ships for recycling, as well as the operation of ship recycling facilities. The aim of the convention is to ensure that ship recycling is completed in a safe and environmentally sustainable manner. To ensure compliance, the Hong Kong Convention also provides for the establishment of an enforcement mechanism, incorporating certification and reporting requirements.

Ships being recycled will be required to carry an inventory listing hazardous materials, which will be specific to each ship. An initial survey will be required to verify the inventory of hazardous materials, followed by intermediate renewal surveys and a final survey before recycling. Ship recycling yards will be required to provide a ship recycling plan specifying the manner in which the individual ship will be recycled, according to the particulars of the ship and its inventory.

Due to the uncertainty surrounding when the Hong Kong Convention will enter into force, the European Union has enacted its own regulation, the EU Ship Recycling Regulation,(1) which applies to vessels flying EU flags or calling at EU ports. The Ship Recycling Regulation entered into force on December 30 2013 and is broadly similar to the Hong Kong Convention, but with the notable exception that it explicitly prohibits the practice of beaching, stipulating that recycling must be completed in "built structures".

Ship recycling is something which owners predominantly need to consider towards the end of a ship's life, but given the introduction of much tighter regulations in the foreseeable future, the disposal of ships will need a greater amount of planning, which means it will be much harder for owners to make last-minute decisions.

For further information on this topic please contact Øyvind Axe or Mattias Grieg at Wikborg Rein by telephone (+47 55 21 52 00) or email (axe@wr.no or mgr@wr.no). The Wikborg Rein website can be accessed at www.wr.no.

Source: international law office. 05 July 2017