Turkish ship recyclers face vessel shortage as India enters market
The ship recycling industry in Turkey has reduced its year-end production target because it has struggled to find ships recently, Steel First was told on Thursday May 29.
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“We are short of ships as we cannot compete with India on prices,” Ersin Ceviker, spokesman for the Ship Recyclers Assn of Turkey (Gemirsander), said.
“India has started to buy 3,000-5,000 tonne ships from the Mediterranean at around $550 per tonne. India’s labour costs are extremely low and they are doing no waste treatment – that is why they can pay high prices for the ships,” he explained.
Vessel costs at that level would not be sustainable for Turkish shipbreakers as scrap prices are generally about $375 per tonne. Turkish ship recyclers are paying no more than $350 per tonne for ships to be broken, Ceviker said.
“We hosted European Union delegates on May 28 and explained the situation. We comply with the EU regulations as much as we can. People invest in shipbreaking and pay the costs of waste management, and high labour costs, but they cannot compete with those ship prices paid by Indian shipbreakers,” he said.
Some Euroepan environmental organisations are reacting to countries which recycle ships without complying with EU regulations. But they cannot stop ships being sold to those countries, according to a spokesman.
Meanwhile, steel mills in Turkey were heard struggling to find ship scrap recently, as shipbreakers were willing to sell material only at higher prices, a source at a mill in Izmir said.
Shipbreakers in Aliaga have broken more than 90 ships so far this year, totalling around 235,000 long dry tonnes (ldt).
The country’s shipbreaking capacity is 900,000 ldt per year and it broke some 800,000 ldt in 2013.
The shipbreaking industry in Aliaga supplies scrap to steel mills including Ozkanlar, Cebitas, Habas, Ege Celik and Izdemir.