• Dear Participants, Ladies and Gentlemen

• INTRODUCTION
• Ship Re-cycling which was at a mere 153 thousand tons
in Pakistan during
• 2006-2007 crossed the One Million Tons during financial
year 2010-2011
• There are about 300 Re-Rolling Mills in the country &
most of them are entirely dependent on the Ship
Breaking Industry ,the local melting Industry, Imported
Billets, Ingots & Re-Roll able scrap they convert into
long products such as Bars, Angles , channels Girders &
special steel.
 LOCAL SALES
• LOCAL SALES

• 1.
• There are only a hand full of melting units in the country who make
good quality billet but the prices are high however at times they run
short of material to sell. Prices of Billet made steel Bar & prices of
steel Bar made of ship plates have increased Ship Breaking
provides about 20% of the countries requirement supplying cut
plates to Re-Rollers for conversion into long products & this is
one Industry which provides Raw material without the use of
• Electricity which is very scarce & very expensive.
 IMPORTS & PRICING
• IMPORTS & PRICING
• In the Financial year ending June, 2014 94 Ships were imported
LDT about 1.3 Million Tons
• 2. January to March this year was lean period only 16 ships =
160576 Long Tons in 3 Months.
• In April 14 ships = 224,034 L/Ton LDT due to improvement in
Pakistan currency Vs US $ to US.$.96.
• 3. In May 12 ships = 41287.40 LDT being pre Budget purchases
were beached prior to the Budget on 03-06-2014 in which additional
Taxes to the Tune of Rs, 900/- Per Ton were imposed increasing
cost of ships by 9$ per LDT Long Ton
 Reduction In Prices
• In the month of May 6 Tankers were Beached one
Panamax 4 Aframax & one VLCC. Generally Aframax
are costlier compared to VLCC. Amongst the Dry Cargo
were 6 Vessels except for one Panamax Bulker @ US$
461 per LDT remaining were small TUGS & Gen Cargo
Ships.
• The 2nd half of May witnessed reduction in international
prices in both India & Bangladesh with rate of Indian
Rupee touching Rs, 60/- containers which had been
selling at $ 515/- to $ 520/- & Bulkers around 480/85
both fell by 15 to 20 $.
 Reduced Productivity
• 4. In June with the approach of Monsoon there is
reduced Productivity as well as the Budget of Pakistan
& Bangladesh hardly any sales were done for Pakistan
& only 2 reported sales of aframax Tankers around $
486 were sold to Pakistan + 10 Gen Cargo/Bulkers Avg.
Price 488 & 2 Container Price $.493 & 3 Reefer @ 499
(with 70 tons Aluminum) were sold to India which means
a sizeable set back though last few days of June
showed signs of recovery with prices rebounding to 500
+ levels from India but no confirmed sale to Pakistan
though quite a few buyers looking around for good
tonnage including VLS.
 Resistance to Sales
• Owners resisting to sell their tonnage at
the current lower levels yet on A/c. of low
freight market ships are being sold.
China no improvement in levels seen.
Bangladesh very slow with only vsls
discharging in close vicinity sold there. .
 Preference & Avg Prices
• PREFERENCE & AVERAGE PRICES
• The New Buildings being ordered are more Fuel efficient
therefore the need to replace the older tonnage more
than 80% of Ships recycled of 20 to 25 years old end up
at the Beaches in Alang, Chittagong and Gadani
• A growing Ship re cycling industry is good for the
environment as it helps replenishing of the aging Fleet
For the Shipping Industry it’s the safest way for disposal
of ships which are not environmentally friendly besides
providing support to trade and Industry connected
with it
 PREFERENCE FOR TYPE OF
VESSELS
• The Preference for the Type of Vessel are as follows:
• Almost 50% of the ships Re cycled in India are
Containers +Roro & 30% Bulk Carriers ,Bangladesh Re
cycles 70% Bulk carriers followed by Containers
whereas in Pakistan more than 60% are Tankers mostly
Aframax and VL’s followed by Bulk Carriers & Some
small Tonnage only 2 Containers were Broken up this
year .
 SUBSIDIES
• In China there is subsidy to Shipping Companies to
scrap vessels before their expiration date & order new
vessels all vessels under Chinese Flag.
• In China the Steel Market is purely Iron Ore based, In
Sub continent it is based on Scrap, Iron Ore Prices china
or below US.$.90 PMT.
 Type of tonnage and average
prices
INDIA
• TYPE OF SHIP LDT REMARKS
• 1) TANKERS UPTO 10,000/- Mostly trading in clean products. There
• is a Preference for Tankers with stainless
• steel in Tanks
• 2) LPG & LNG UPTO 8,000/- Average Price 498 $ per Ton in May
• 3) CONTAINERS UPTO 25,000/- Average Price 498 $ per Ton in May
• 4) ROROS UPTO 15,000/- Average Price 515 $ per Ton in April
• 5) GENERAL CARGO UPTO 10,000/- Average Price 480 $ per Ton in May
• 6) BULKERS UPTO 10,000/- Average Price 500 $ per Ton in May
• 7) REEFERS UPTO 8,000/- Average Price 495 $ per Ton in May
• BANGLADESH

• 1) TANKERS UPTO 20,000/- Average Price 490 $ per Ton in May

• 2) BULKERS UPTO 20,000/- Average Price 490 $ per Ton in M ay
• 3) CONTAINERS UPTO 20,000/- Average Price 450 $ per Ton in
March
• CHINA

• 1) BULKERS UPTO 20,000/- Average Price 338 $ per Ton in March 2014
• 2) CONTAINERS UPTO 20,000/- Average Price 341 $ per Ton in April,2014
•
Spares & other Factors effecting
Price mechanism
• SPARES AND OTHER FEATURES EFFECTING PRICE
• 5. As usual vessels with Bronze Spare Propeller get
extra for same depending upon size
• 6. In Pakistan the Aframax Tanker is approximately
more in price compared to VLCC
• Tankers with stainless steel in Tanks, almost all of them
go to India because of price difference of stainless steel
which is much more in India. Also the LNG carriers have
a good demand.
• 7. The Bulkers over 10,000 LDT to 20,000 are
more in demand & A PREMIUM may be given
compared to smaller Bulkers.in Pakistan
• Bulkers whose Ballast Tanks are coated &
whose trading history is good like grains, steel
products, Soya Bean Meals, Sugar, Iron ore
compared to Fertilizer , Sulphur, Clinker &
Cement, smaller Tankers get better price from
India
 BULKERS DEMAND
• 7. The Bulkers over 10,000 LDT to 20,000
are more in demand & a premium may be
given compared to smaller Bulkers.
• Bulkers whose Ballast Tanks are coated
& whose trading history is good like grains,
steel products, Soya Bean Meals, Sugar,
Iron ore compared to Fertilizer , Sulphur,
Clinker & Cement smaller Tankers get
better price from India
 Laid up & Dead Ships
• LAID UP VESSELS & DEAD VESSELS : Laid up
& Dead vessels delivered Under Tow are less in
Price depending on whether it was Under Hot Lay
up or Cold Lay up ,In case of Hot Lay up 8 to 10
Crew keep vessel operating so owners do not
loose much scrap value and these can be
reactivated at short notice Cash Buyers with
Own Tugs can be more competitive as cost of
Delivery is reduced..
 DE BALLASTING OF DEAD
SHIPS
• The De Ballasting of Under Tow vessels
takes more time as ships Ballast pumps
and Generators are not working and these
have to be arranged from Shore which
also adds up to the Expense
 class
• 8. CLASS: The class to which the ship belong s plays
an Important role in determining the price – ABS Class
happens to be the Leader since very long & US owned
vessels have a premium & bigger
 CONTAINERS
• 9 Containers almost all of them go to India one reason
being that due to higher draft it can only be beached at
very few yards in Pakistan secondly on A/c of more
attachments the local sales Average Rate comes down
substantially the price difference between the prime
Sheet & scrap is quite a lot as such the more recovery
of items like cables etc. & bigger Generators, Motors etc.
are not enough to compensate the reduction in Sales
volume of prime sheet. In India difference between prime
sheets & Scrap is quite normal therefore the
advantage of good machinery increases
the price from Indian Breakers
 PERMANENT BALLAST
• Almost same argument applies to RO RO
vessels, but existence of Permanent
Ballast, Cement concrete in some
RORO”S is a minus point though its Wt. is
excluded from LDT due to increase in
cutting cost removal of Ballast.
 Location of vessel Prior to
Delivery
• 10. LOCATION: The Demolition voyage is Undertaken
on its own power or Under tow sailing from
Caribbean,Far East ,West Africa ,Middle East etc
Vessels in Middle East are more economical to deliver
at Alang or Gadani whereas those in Far East
Singapore, Malaysia have better chance to be delivered
to Chittagong therefore if a Bulker is offered 460 from
B.Desh the offer from India/Pakistan should be 10 to 15
$. More to be viable for owners. To steam it to the Sub
continent which is about 6 to 8 days additional time for
delivery with additional expense on voyage, the smaller
the vessel more the expense per LDT on Fuel, Crew,
Insurance, Registration etc.
 WAITING TIME AT
ANCHORAGE
• 11. WAITING TIME: This is more in
India as Vessels are Beached on High
tides & have to therefore wait for a few
days whereas in Pakistan similar issue
exists at only very few yards.
 Customs formalities
• 12. CUSTOMS FORMALITIES: These are
completed before Beaching at Alang whereas in
Pakistan these are done after Beaching.
Including Boarding, Rummaging lodging of
Manifest & Crew sign off.
 MONSOON
• 13. MONSOON: This month June due
to weather conditions Beaching is being
delayed in view of difficulty being
encountered during boarding infact smaller
vessels Beaching had to be cancelled.
M.T AURIGA
• PRESENTED BY
• JAWED IQBAL
• SHOAIB SHIPPING
AGENCIES
• KARACHI-PAKISTAN