Alang Ship Recycling: A Worrying Trend of Decreasing Ship Arrivals
In the 40th year since its establishment, the Alang Ship Recycling Yard is facing a significant decline in its once-thriving shipbreaking industry. Historical data reveals that at its zenith, Alang claimed a remarkable 60% share of the world’s shipbreaking activity. However, this dominance has dwindled, and recent statistics for the July to September quarter highlight a sharp drop, with Alang contributing merely 26% to the global ship scrapping scene. During this period, out of 111 ships sent for scrapping globally, Alang received a mere 29.
The latest figures are a cause for concern for the ship recycling industry, as they indicate a faltering trend. The once bustling Alang Ship Recycling Yard, located in Bhavnagar, is grappling with a business slowdown. The decline is starkly evident when compared to its historical performance, where an average of one ship per day used to dock at Alang for scrapping. However, the scenario has shifted dramatically, with the yard not receiving a single ship for breaking from November 23rd to December 7th.
This downturn is not limited to Alang alone; globally, the shipbreaking landscape is evolving. Bangladesh emerges as a new leader in ship scrapping, claiming half of the total with 54 ships sent for scrapping during the same July-September quarter. Meanwhile, Alang’s decline is further highlighted by the fact that Turkey and Pakistan, among other countries, are witnessing an increase in shipbreaking activities.
Data provided by the Ship Recycling Industries Association India indicates a substantial decline in the number of ships being scrapped at Alang over the past three years. In the peak year of 2011-12, Alang saw a record-breaking 415 ships arriving for breaking. However, in the current scenario, the number has dwindled significantly.
Rameshbhai Mendpara, the Vice President of the Ship Recycling Industries Association India, points to economic factors as a key driver behind the diminishing shipbreaking activity in Alang. The current economic climate has instilled fear among industrialists, discouraging them from bringing vessels to the yard due to potential losses. Additionally, the local scrap market is witnessing a continuous decrease, adding to the apprehension among shipbreakers.
Despite government incentives aimed at revitalizing the ship recycling business, the industry remains lackluster. Even experienced shipbreakers from Alang find it challenging to predict when the tide will turn and the number of ships arriving for scrapping will rise again. The prevailing wait-and-see strategy adopted by shipbreakers reflects the uncertainty surrounding the economic losses associated with shipbreaking activities.
Contrary to expectations, ship prices have not seen a proportional decrease in line with the reduced ship-breaking activity. This has led shipbreakers to adopt a cautious approach, adopting a wait-and-see strategy as economic losses loom large.
Another factor contributing to the slowdown is the completion of most plots in Alang according to international standards. Over the last three years, these plots have been finalized, resulting in a decrease in the daily production capacity compared to previous years.
Another factor contributing to the slowdown in Alang’s shipbreaking industry is the completion of most plots in the area according to international standards over the last three years. This has resulted in a reduction in the daily production capacity compared to previous years.
In summary, the Alang Ship Recycling Yard, once a global hub for shipbreaking, is experiencing a significant downturn in business. Economic uncertainties, declining local scrap market conditions, and reduced production capacity due to plot completions are all contributing to the challenging environment. The industry is at a crossroads, with shipbreakers and stakeholders closely monitoring the situation, hoping for a revival in the shipbreaking activities that once defined Alang’s prominence on the world stage.
The absence of a single ship for two consecutive weeks underscores the severity of the situation. The days of an average of one ship per day being docked for breaking are now distant memories, highlighting the urgent need for strategic measures to revitalize Alang’s ship recycling industry.