Bhavnagar district is known for its ship recycling industry, but the local scrap market has also taken a hit after the Great Recession, and there is no telling when the market will stabilize and when the industry will boom. Alang usually had an average of 25 ships per month. In contrast, during the first 6 months from January to June 2023, only 65 ships made their final voyage to Alang. Due to the limited availability of vessels in the international market, the number of shipwrecks has decreased.
According to Rameshbhai Menandpara, vice president of Ship Recycling Industries Association (India), there are opportunities for sunshine and shade in any industry. Ship recycling has now become stagnant. The market situation is very uncertain, no one can predict what will happen when. Uncertainty in dollar price, low availability of ships in the international market was a cause of concern, now the domestic scrap market has also collapsed.
80 percent of the vessels that come to Alang are scrap and are recycled. Scrap prices have fallen by Rs 5 per kg in two months, well below the affordable level. Ship prices have also come down, but compared to that, the plunging prices of scrap are causing concern among industrialists. Industry is adopting a wait-and-see policy to buy new vessels even as vessel prices have fallen to around $40 per tonne. The economic cycle of Bhavnagar district mainly depends on the ship recycling industry.
Market forces dominate government efforts
State and Central Governments are taking several encouraging steps at various levels to revive the ship recycling industry. But market factors related to the ship recycling industry are overturning all the government’s efforts. There is an international-domestic market imbalance.
