As a result of Bangladeshi banks’ reluctance to grant letters of credit due to the persistent US dollar shortage, industry insiders claim that the country’s imports of scrap vessels fell to their lowest level in four years in 2022, as reported by The Daily Star.
Imported scrap ships
Besides, scrap vessels have become costlier in the global market as US sanctions centring the Russia-Ukraine have halted imports from the region.
“So, that is why many local importers have imported less than before,” said Taslim Uddin, proprietor of the KR Ship Recycling Yard in Sitakunda upazila of Chattogram.
In 2022, 151 scrap vessels in total were imported, a decrease of nearly 27% from 2019. According to data from the Bangladesh Ship Breakers and Recyclers Association, the weight of all imported scrap ships decreased by almost 52% during the same time (BSBRA).
According to data from the NGO Shipbreaking Platform, Bangladesh topped the list of nations that dismantled ships in 2021, ahead of Pakistan and India, despite the fact that only 45 of the 158 shipbreaking yards in Chattogram are now in operation.
According to the most recent statistics from the platform, which was made public on February 1, 443 oceangoing commercial ships and offshore equipment would be sold for scrap in 2022.
On the tidal shores of Bangladesh, India, and Pakistan, 292 huge tankers, bulkers, floating platforms, cargo, and passenger ships ended up in a dirty and hazardous breakdown.
Additionally, it stated that while dismantling these vessels in Chattogram, at least 10 workers died and 33 others were hurt.
Local reports also claimed three injuries in Gadani, Pakistan, and three deaths in Alang, India. Some of these mishaps happened on board ships that belonged to well-known maritime firms, including Berge Bulk, Sinokor, and Winson Oil.
The NGO Shipbreaking Platform is a global alliance of organisations with a base in Belgium that strives to undo the environmental harm and human rights violations brought on by shipbreaking operations.
Local shipbreakers and recyclers claim that steel rerolling mills and barge shipbuilders are the primary users of shipwreck material.
In Bangladesh, over 70% of the demand for scrap is imported, with the remaining 30% being satisfied by the domestic industry.
The lack of scrap in the current economic climate, according to Philip Barua, head of brand and communication at GPH Ispat Bangladesh, has had a negative impact on the market.
According to him, several shipbreaking yards around the nation are experiencing losses this year as a result of having to account for significant increases in US dollar prices due to the taka’s depreciation.
The Dollar Crisis
The US currency crisis has prompted the closure of 30 shipbreaking yards in the last year, costing 10,000 jobs, according to figures from the BSBRA and Ship-breaking Workers’ Trade Union Forum.
There are 185 shipbreaking yards in Chattogram that are mentioned, but only around 50 are really working at any given time. As scrap vessel imports fell, 30 of them are currently closed, according to BSBRA President Md Abu Taher, who spoke to The Daily Star.
“The dollar crisis is the root cause of the shipbreaking industry’s plight. We are unable to import scrap ships from the Russia belt due to the war,” he said.
“Apart from this, due to the increase in freight charges, the number of scrap ships in the international market has decreased due to which the owners are not easily declaring ship abandonment,” Taher added.
Tapan Dutta, the convener of the Ship-breaking Workers’ Trade Union Forum, said at least 10,000 workers in the sector have lost their employment as a result.
“Citing the slump in business, yard owners failed to pay many of their employees. All shipbreaking yards will shut down if this keeps on,” he added.
Did you subscribe to our newsletter?
It’s free! Click here to subscribe!
Source: The Daly Star