The Times of India – Slowdown sinks Alang’s ship-breaking industry

Written by Vijaysinh Parmar & Kalpesh Damor

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9 December 2015 - After offloading its last cargo at Kandla port, a 7,000-tonne Japanese vessel anchored a couple of months ago at Asia’s largest ship-breaking yard, Alang, for being dismantled. The owner demanded a price of $310 per tonne even as local buyers insisted on $300 a tonne as the economics didn’t work beyond that mark. While the negotiations were on, a Pakistani buyer clinched the deal at $312 and the vessel set sail for the neighbouring nation.

Established in 1984, the ship-breaking industry at Alang Sosiya Ship Recycling Yard is wading through choppy waters thanks to the slowdown and increased dumping of steel products from China.

Although it has the capacity to recycle 450 ships a year, the yard has so far dismantled only 30 in 2015-16. In 2011-12, it recycled 415 ships. Ever since, the number has been dwindling.

“Global slowdown and lack of demand from the steel sector as well as real estate has hit us hard. What worries us the most is that China offers finished steel products at the price we buy raw material, or ships,” said Haresh Parmar, joint secretary, Ship Recycling Industries Association (India).

Scrap from ships is mostly used for making TMT bars. Only 40-odd out of the total 180 plots are operational in Alang.